May Home Prices: Accelerating Price Declines

Last month's headline was April Home Prices: Majority of Cities See Price Declines in Existing Homes; New Home Prices Continue to Decelerate. Deceleration was the key adjective: there were still 44 cities with month-on-month price increases, but the increases were very small. In May, this number plunged to 15 cities. Last month, 35 cities saw price declines and 20 were flat. Most of the latter will probably decline in June. If so, April-May will mark the peak for home prices in this cycle.

New home price declines are also much larger than price increases now. The largest increase was 0.3 percent in one city, Zhengzhou, but among cities with falling prices, the average decline was more than 0.3 percent.

March: 4 cities saw declines in price mom, 10 cities were flat, 56 were up.
April: 8 cities saw declines in price mom, 18 cities were flat, 44 were up.
May: 35 cities saw declines in price mom, 20 cities were flat, 15 were up.

Notable:

Of cities that did see mom price gains, 10 were only 0.1 percent.

Biggest price gains in new 商品房: 0.3 percent in Zhengzhou. The biggest decline was 1.4 percent in Hangzhou. Of 15 cities seeing price increases, all but Zhengzhou were for 0.1 percent or 0.2 percent; there were 17 cities with declines of 0.4 percent or more. Declines are accelerating.

Existing home price indexes fell in 35 cities. In April, only 2 cities were down yoy; this rose to 5 in May.

In April, I counted 44 of the 70 cities saw existing home price declines in at least one area segment (last table below). This month the number rose to 51 cities.

Below is the data for May. The first table is residential housing. The data is MoM, YoY, and since 2010. The second table is commercially built properties （商品房）. The third table is existing homes. The fourth table breaks down the prices changes for 商品房 by sqm. The fifth table does the same for existing homes.