China’s housing prices fell again in November, marking the seventh consecutive month of decreasing home values. Real Estate data provider China Real Estate Index System surveyed 100 cities and found average new-home prices fell 0.38% in November (Wall Street Journal). 76 of the cities analyzed showed a decline in housing prices, marking 3 more markets now reporting falling house prices than in October. Chinese housing prices began falling in May and have continued their descent despite Government action.
In September, China cut mortgage rates and down-payments for many home-buyers (Yahoo Finance). However, these efforts have been largely unsuccesful as exemplified by continued falling prices the past 2 months (October and November). On November, 21 China decided to cut interest rates. This was the first interest rate cut in more than 2 years, as China’s Central Bank cut the benchmark one-year lending rate by .4 percentage points (AFP).
Analysts wonder if these interest rate cuts will give the housing industry a much-needed spark. Some insiders have stated more must be done to ensure the housing industry rebounds, while others have stated lower interest rates will energize the real-estate market by early 2015.