Home prices declined at a faster pace in May in major cities, while other data show a mixed picture for the world’s second-largest economy
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China’s broken housing market isn’t responding to some of the country’s boldest stimulus measures to date—at least not yet.
The Chinese government has been stepping up support for housing and other industries in recent months as it tries to revitalize an economy that has continued to disappoint since the early days of the pandemic.
But fresh data for May showed that businesses and consumers remain cautious. Home prices continue to fall at an accelerating rate, and fixed-asset investment and industrial production, while growing, lost some momentum.
“China’s May economic data suggest that policymakers have a lot to do to sustain the fragile recovery,” Yao Wei, chief China economist at Société Générale, wrote in a client note on Monday.
The worst pain is in the property sector, which has been struggling to deal with oversupply and weak buyer sentiment since 2021, when a multiyear housing boom ended . The market still doesn’t appear to have found a floor, even after Beijing rolled out its most aggressive stimulus measures so far in mid-May in hopes of restoring confidence.
In major cities, new-home prices fell 4.3% in May compared with a year earlier, worse than a 3.5% decline in April, according to data released Monday by China’s National Bureau of Statistics. Prices in China’s secondhand home market tumbled 7.5%, compared with a 6.8% drop in April.
Home sales by value tumbled 30.5% in the first five months of this year compared with the same months last year.
“This data was certainly on the disappointing side and may ring some alarm bells, as May’s policy support package has not yet translated to a slower decline of housing prices, let alone a stabilisation,” said Lynn Song, chief China economist at ING.
Economists had also been hoping to see a wider recovery this month after Beijing started rolling out a planned issuance of 1 trillion yuan, the equivalent of $138 billion, in ultra-long sovereign bonds in May. The funds are designed to help pay for infrastructure and property projects backed by the authorities. Investors gobbled up the first batch of these bonds.
Monday’s bundle of economic data, however, underlined how the country still isn’t firing on all cylinders.
Retail sales, a key metric of consumer spending, rose 3.7% in May from a year earlier, compared with 2.3% in April, according to the National Bureau of Statistics. While the trend is heading in the right direction, it is still a relatively subdued level of growth, and below what most economists believe is needed to kick-start a major revival in consumer spending.
The expansion in industrial production—5.6% in May compared with a year earlier—was down from April’s 6.7% increase. Fixed-asset investment growth, of which 40% came from property and infrastructure sectors, also decelerated, to 3.5% year-over-year growth in May from 3.6% in April.
Key to the sluggish economic activity data in May—and China’s outlook going forward—is the crisis in the property market, which has proven hard for policymakers to address.
The property rescue package in May included letting local governments buy up unsold homes, removing minimum interest rates on mortgages, and reducing payments for potential home buyers. It also included as its centerpiece a $41 billion so-called re-lending program launched by the People’s Bank of China, which would provide funding to Chinese banks to support home purchases by state-owned firms.
The hope was that by stepping in as a buyer of last resort for millions of properties, the government would manage to mop up unsold housing inventory and persuade wary home buyers to re-enter the market. In turn, Chinese consumers, who have most of their wealth tied up in real estate, would feel more confident about spending again, thereby lifting the overall economy.
But the size of the re-lending program wasn’t big enough to convince home buyers, said Larry Hu , chief China economist at Macquarie Group. “Meanwhile, their income outlook also stays weak given the current economic condition,” he said.
For the property market to bottom out and reach a new equilibrium, mortgage rates, which stand at around 3-4% in China, need to be as low as rental yields, which are currently below 2% in major cities, said Zhaopeng Xing, a senior China strategist at ANZ. He said that a large mortgage rate cut will need to happen eventually.
The other key part of China’s push to revive growth revolves around the manufacturing sector, with leaders funnelling more investment into factories to boost output and reduce the country’s reliance on foreign suppliers of key technologies.
The result has been a surge in production. But with domestic consumption not strong enough to absorb all those goods, many factories have been forced to cut prices and seek out more overseas buyers.
Data released earlier this month showed that Chinese exports rose faster in May than the month before.
However, the export push is butting into resistance as governments around the world worry about the impact of cheap Chinese competition on domestic jobs and industries. The European Union last week said it would impose new import tariffs on Chinese electric vehicles, describing China’s auto industry as heavily subsidised by the government, to the point where other countries’ automakers can’t fairly compete.
The U.S. has also hit Chinese cars and some other products with hefty duties, while countries including Brazil, India and Turkey have opened antidumping investigations into Chinese steel, chemicals and other goods.
Beijing says such moves are protectionist and that its industries compete fairly with global rivals.
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A vibrant 1954 Palm Springs home featuring eight colorful murals by late artist Shawn Savage is on the market for $2.295 million. The 2,237-square-foot property features bold hot-pink doors, three bedrooms, a pool, mountain views and playful interiors blending modern glamour with classic Palm Springs style.
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A bold 1950s home in Palm Springs, California, adorned with eight colorful murals by the late artist Shawn Savage, is coming to market ahead of the city’s annual Modernism Week.
The white stucco home on El Camino Way, built in 1954 and recently renovated, has an asking price of $2.295 million. Its staggered facade features three playfully abstract murals on either side of double-height hot pink doors.
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The sellers are Los Angeles-based partners John Freeman and Mathieu Faure, who knew it was “the one” when they saw it after several months of searching in the winter of 2023. “It’s a happy house,” Freeman said. “We really liked the feel of the house: the uniqueness, the openness, the brightness—and the art.”
Located in the Mesa neighborhood of Palm Springs, which backs up to the San Jacinto Mountains, the 2,237-square-foot house features three bedrooms, an angled bonus room and a yard with a pool, desert mountain views and another colorful mural running alongside the pool.
“I never thought in my life I would have a house with pink doors,” said Faure, a producer at Apple TV who is originally from Paris. “It’s so colorful, it’s so different. And so Palm Springs.”
The layout of the home creates a smooth flow from the front doors through the open-plan common area—a foyer, bar, and living and dining room—into the kitchen around a fireplace wall and out to the yard. A corridor leads to a private bedroom wing, where the primary suite has floor-to-ceiling windows and the primary bath is only a tad smaller than the bedroom.
Faure has filled the home with Jonathan Adler furniture, rugs and accessories, riffing on the energetic California vibes of the house to create an aesthetic of “modern American glamour,” he said.
“It was enjoyable for me to play with different types of furniture and make this house ‘happy chic,’ as I describe it,” he said.
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“He did a fantastic job,” said Freeman, who is an attorney and consultant. “It does kind of bring a smile to my face whenever I walk into the house.”
Since the furniture and decor were chosen for the particularities of the space, the couple is open to selling them with the home. Their West Hollywood house is already furnished; the collection doesn’t match the vibes of a Houston loft they bought near family; and Faure can’t imagine these pieces in New York—where he’s lived in the past—he said.
The duo bought the Palm Springs house for $1.925 million in 2024, according to property records, and will list the home Monday. They are represented by Stewart Smith, Patrick Jordan and Kevin Stanley of Bennion Deville Homes/Luxury Portfolio International.
The previous owners had purchased the home in 2021 for $975,000 and then spent more than two years and $700,000 on the renovation, according to Realtor.com. They commissioned Savage, a local Palm Springs artist and painter known for his joyful abstract work, to decorate the home.
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Savage, who died in 2024, lived in the Coachella Valley from 2003, and his work can be found in various local institutions and is on exhibit at the Illumine Gallery in Palm Springs. “Some artists pass through a place. Shawn Savage became a part of it,” the gallery’s description states.
Unsurprisingly, the murals invite lots of friendly conversations, as well as guided tours and interested lookers, but never to a degree that it disturbed the peacefulness of their home or the neighborhood, the sellers said. “It felt like living in an art gallery, and you have the exterior that you would share with the world,” Faure explained.
The neighborhood also played a role in their decision to buy, because of its access to the hiking trails of the San Jacinto Mountains, the lack of through-roads and the neighborly environment.
“It’s a very friendly place,” Faure said.
