China's New Housing Price Decline Hits Largest in 6 Years

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Cho Hyun-ui] As the default of Evergrande, China's largest private real estate developer, has been formalized, the decline in new housing prices in China recorded the largest drop in six years.

Major foreign media reported on the 15th that, based on data released by the National Bureau of Statistics of China, new housing prices in China fell by 0.3% compared to the previous month in November. This is the largest monthly decline since February 2015.

Since the Chinese real estate industry accounts for nearly 30% of the gross domestic product (GDP), such contraction has emerged as the most serious challenge to the Chinese economy. Foreign media explained, "In recent months, the real estate sector has rapidly contracted amid liquidity crises and strong regulatory turmoil."

Global credit rating agency Fitch downgraded Evergrande to a 'restricted default' rating on the 9th, formalizing the default.

Another real estate developer, Zajiaoye, also halted trading on the Hong Kong stock market on the 8th amid a default crisis. Zajiaoye issued the second largest amount of dollar bonds in China after Evergrande.

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