China’s property slump has deepened official data showed, with new home prices seeing their biggest month-on-month decline since 2015.
New construction starts in January to October also fell 7.7%, compared to a year earlier.
The country’s property market has been shaken in recent months as real estate giant Evergrande struggles to keep up interest payments on its huge debts.
China has also been hit by a new wave of Covid cases and major power cuts.
The 0.2% drop in new home prices in October was the biggest fall seen in China since February 2015.
It also marks the first decline in new home prices +since March 2015.
Sentiment in China’s property market, which accounts for about a quarter of the country’s economic activity by some measures, has been rocked as major property developers grapple with huge debts.
The Evergrande issue
The industry has come under intense scrutiny as fears continue over the future of companies including real estate giant Evergrande.
Last week, Evergrande, which is saddled with around $300bn (£223bn) of debt, avoided defaulting on overdue interest payments of $148m.
Just days before a 30-day grace period on the payments was set to expire it sold a 5.7% stake in media firm HengTen Networks Group for around $145m.
The previous week Evergrande’s car making business sold its UK-based electric motor business Protean for an undisclosed sum.
Other Chinese home builders have also struggled to find the money to make debt repayments.
Shares of developer Fantasia plunged by 50% last week after it said there was no guarantee it would be able to meet its other financial obligations following a missed payment of $205.7m in October.
And earlier this month, trading in shares of Kaisa Group and three of its units was halted in Hong Kong after one of its businesses missed a payment on a wealth management product.
The debt crisis faced by Chinese property giants had triggered concerns amongst some international investors that it could have a major impact on global financial markets.
However, in recent weeks a number of high-profile figures have moved to help calm those fears.
On Monday, the governor of the Bank of Japan Haruhiko Kuroda said that he believed that China’s property woes were unlikely to trigger a global shock as the amount of money owed to creditors outside the country was relatively low.
“We don’t expect China’s property woes to have a big impact on Japan’s economy or financial institutions. We also don’t see a huge risk of the woes triggering a big, global shock,” Mr Kuroda told business leaders in the city of Nagoya, central Japan.