China’s resale home prices fall faster in June, signalling continued property market distress

China’s resale home prices fell at an accelerated pace in June, deepening concerns about the country’s ailing property market and underscoring the limited impact of recent government support measures, a private survey showed on Tuesday.

According to the China Index Academy, one of the country’s top real estate research firms, resale home prices declined by 0.75% in June, compared to a 0.71% drop in May. On a year-on-year basis, prices fell 7.26%, marking a slight deepening of the 7.24% annual decline recorded in the previous month.

The data reflects persistent structural weaknesses in the sector, which has remained under pressure since 2021 when regulators moved to curb excessive borrowing by property developers. The resulting liquidity crisis among major firms led to a wave of unfinished housing projects, sharp declines in sales, and a rise in defaults.

New home prices, meanwhile, increased at a slower rate in June, rising by just 0.19% after a 0.30% gain in May, the survey showed.

“The real estate market is still in the process of adjustment... a market stabilisation and recovery still require further policy efforts,” the China Index Academy said in its report.

Despite interest rate cuts and incentives for homebuyers, confidence remains weak among consumers wary of incomplete projects and volatile pricing. In addition, an oversupply of housing in certain cities has further diluted the impact of stimulus efforts.

A recent report from Goldman Sachs projected that new home demand in China may drop to fewer than 5 million units annually—down significantly from the peak of 20 million units in 2017.

In response, Chinese officials have pledged further action. At a cabinet meeting last month, senior leaders committed to optimizing policies to boost housing demand, improve supply mechanisms, and stabilize the broader real estate market.

Still, the latest figures suggest that more aggressive and targeted measures may be needed to reverse the downturn in a sector long considered a pillar of China’s economy.

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