China's Housing Market Faces Steep Decline Amid Lingering Economic Concerns

China's housing market experienced its sharpest price drop in nine years this July, highlighting the challenges faced by various support policies. Despite efforts to bolster the sector, consumer confidence remains low. Analysts suggest more targeted interventions are needed to prevent a prolonged slump and achieve Beijing's ambitious economic targets.

China's new home prices fell at their fastest pace in nine years in July, as a slew of support policies failed to stabilize prices and restore confidence in the struggling property sector. This prolonged housing market slump is weighing heavily on the world's second-largest economy and its consumers, raising questions over Beijing's 5% GDP target for 2024.

According to data from the National Bureau of Statistics (NBS), new home prices fell 4.9% from a year earlier, marking the sharpest drop since June 2015. Analysts from ING noted that the property market will likely continue to need more policy support to establish a bottom.

Beijing has intensified its efforts to support the sector, once accounting for a quarter of the economy, by reducing mortgage rates and lowering home buying costs. However, external downturns have limited the impact of these policies. In July, the Politburo reiterated its commitment to supporting unfinished projects and converting unsold apartments into affordable housing to address the ongoing crisis.

(With inputs from agencies.)