(Yicai Global) May 18 -- More Chinese cities reported month-on-month declines in the prices of new homes in April because of Covid-19 and other factors, while those of pre-owned properties also fell, according to official data.

New apartment prices dropped in 47 Chinese cities last month, nine more than in March, and prices rose in only 18, according to figures the National Bureau of Statistics published today. Secondhand home prices fell in 50 of the 70 cities surveyed, up five from March.

The number of cities seeing month-on-month price gains for new apartment shrank in April for the first time this year, marking the third-lowest number in the past seven years. 

Downward economic pressure has intensified amid Covid outbreaks and conflict abroad, and the recovery of market confidence has been set back as falling income expectations have crowded out risk appetite, said Xu Xiaole, chief analyst at Beike Research Institute. These are the root causes of China’s sluggish property market, he said. 

In April, new apartment prices ticked up 0.2 percent in first-tier cities from a month earlier, 0.1 point lower than in March. In second-tier cities, they fell 0.1 percent, after being flat in March; and in third-tier cities, prices slipped 0.6 percent, 0.4 point more than March’s decline.

Pre-owned apartment prices fell 0.3 percent in third-tier cities, the same as the prior month, while the decline in second-tier cities was 0.3 percent, up from 0.1 percent the month before. In first-tier cities, prices continued to recover, edging up 0.4 percent, the same as in March.

It is important to prevent expectations of further price declines as that would curb demand, Xu said. Policies are needed to boost people’s incomes such as tax cuts and a lower debt-repayment burden for buyers with mortgages, Xu suggested, adding that support is also needed to mitigate the difficulties facing developers. 

Editors: Xu Wei, Tom Litting