Chinese Home Prices Fall in December

The CREIS report for December shows home prices fell again, and at a slightly faster pace. A refresher: in November, prices fell 0.38% nationally, less than the 0.40% drop in October. 76 out of 100 cities saw prices fall in November. In December, prices fell 0.44% nationally, but only 70 cities saw falling prices last month as market continues to show signs of bifurcating. Volatility also continued to decline in terms of the number of cities with large price drops. Only 27 cities saw new home prices fall more than 1% in December, down by 10 cities from November. In sum, although the year-on-year number looks worse (down 2.69% in December, larger than November's 1.57% yoy drop) and will continue to worsen into the first part of 2015 due to the price peak starting around April-May, the housing market decline is still decelerating.

The most surprising number was the 3.25% drop in Wenzhou, the worst out of all 100 cities measured. Wenzhou's housing market topped in 2011 and it looked as though it would bottom out in 2014, but prices have started sinking at an accelerating pace.