China property prices post record fall in Feb

10 February 2009

Average property prices in China’s urban areas fell by 1.2% in February, compared to the corresponding month in 2008, the government announced this morning, the greatest annual fall since records began in 2005.

The month-on-month price fall of 0.2% in February was unchanged from the pace of decline in January, the National Development and Reform Commission said.

China’s economy is heavily reliant on the property industry, which accounts for approximately quarter of all investment, so a sustained downturn in prices would weigh heavily on business activity and feed into the broader deflation threat.

The 1.2% annual drop in average property prices across 70 large- and medium-sized cities was an acceleration from January's decrease of 0.9 percent, the NDRC said on its website - ndrc.gov.cn.

Property prices have been in negative territory since December, which is in stark contrast to the double-digit price growth being recorded this time last year.

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