CHINA’S new-home prices fell in December for the fourth straight month and are expected to continue heading lower this year, pointing to a persistent property downturn that is increasingly dragging on the broader economy.

    Average new-home prices across China fell 4.3 percent last month compared with year-ago levels, a faster decline than the 3.7 percent drop seen in November, according to Reuters calculations from official data published yesterday.

    The deepening fall in house prices indicates government efforts to revive the slumping market have yet to halt price declines, although lower prices and easier borrowing conditions appear to have translated into improved sales numbers.

    The housing market is expected to remain weak into 2015 on excess supply, though a market collapse is seen to be unlikely.

    China’s real estate market has been plagued by falling prices and high inventories in recent months, crimping demand in 40 economic sectors ranging from steel to cement to furniture.

    “We expect the housing cooldown to run into this year,” said Liu Yuan, the head of research at Centaline, a property consultant, in Shanghai.

    “In most tier 2 or tier 3 cities, inventory destocking remains the main task for local property markets in 2015.”

    Economists believe the cooling housing market will continue to pose the biggest risk to the world’s second-largest economy, even as the Central Government tries to stimulate overall growth.

    “We expect China’s GDP growth to slow further in 2015 to 6.8 percent, as the ongoing property downturn leads to further weakness in construction and industrial production, and related investment,” Wang Tao, China economist at UBS, wrote in a note.

    Chinese developers will launch more housing projects in 2015 as they strive to meet sales targets and boost market share — at the risk of adding to already-bloated inventories, a survey conducted by Reuters showed last week.

    “Inventories are high. We can’t raise prices until after the market digests them,” said the chief executive officer of a developer based in Guangdong.

    “The sales went up but prices didn’t — it won’t be easy for us to raise prices.”

    Property sales in 70 major cities hit the highest level seen in 2014, up nearly 9 percent, in December from November, according to data from the National Bureau of Statistics (NBS).

    The NBS data also showed new-home prices fell year on year in 68 of the 70 major cities it monitors, unchanged from in November.

    On a month-on-month basis, home prices fell 0.3 percent in December, the eighth consecutive monthly fall, but at a slower pace than the 0.5 percent dip in November.(SD-Agencies)