China is trying to rescue its property market. Prices are still plunging

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Prices of new homes in China suffered their biggest fall in nearly a decade last month, in a sign that Beijing’s “historic” real estate rescue has not yet revived demand.

Prices in 70 major cities were down 0.7% in May from April, National Bureau of Statistics figures showed on Monday. That’s the steepest month-on-month drop since October 2014, according to Reuters calculation. According to separate calculations by the Macquarie Group, prices of existing homes in those cities fell by 7.5% year-on-year last month, marking the biggest decline on record.

3% rise in April and beating market forecasts. Much of that boost came from a massive government trade-in programs for used cars and old home appliances, aimed at bolstering domestic consumption. The Labor Day “Golden Week” holiday, which ran from May 1 to May 5, also helped reignite some consumer spending. Industrial output lost some momentum, growing 5.6% in May from a year ago, compared to April’s 6.7% increase. Fixed asset investment also missed expectations. But China’s exports jumped 7.

 

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