China Home-Price Fall Slows as Q3 GDP Print Nears

The slower price falls represent a modest boost for property developers and the yuan, but are insufficient to shift the market narrative on their own. The bigger channel is oil: as the world's top crude importer, Chinese demand influences global prices, particularly with Gulf supply squeezed by the Iran war. Disappointing GDP and activity figures would hit the Australian and New Zealand dollars, which act as proxies for China. The property investment number will in particular guide iron ore and industrial metals.

• The PBOC set its daily USD/CNY reference rate at 6.7208, against a market estimate of 6.6897.

Home prices in China are still dropping, but at a slower pace, marking one of the few bright spots from the property sector recently. The imminent batch of key releases is not expected to change this story much.

Key details are as follows:

• New home prices fell 0.14% from August, against a 0.17% decline a month earlier.
• Year-on-year, new home prices dropped 2.8%, an easing from a 3.0% fall in August.
• Existing home prices fell 0.26% month-on-month, after a 0.31% decline previously.
• All metrics still show falling prices, but the rate of decline has lessened; late-September support policies have not been fully realised yet.
• Third-quarter GDP data is expected at 02:00 GMT (22:00 US Eastern on Sunday), with projections of 4.4% year-on-year and 1.1% quarter-on-quarter, against a 4.5% to 5.0% target.
• September expectations show industrial production around 5.3% to 5.5%, retail sales below 1%, and fixed asset investment down roughly 7.5% for the year to date, with a loan prime rate decision set for Tuesday.

New home prices fell for another month in September, but the decline slowed relative to August, a tentative hint that the property downturn could be stabilising. This comes just ahead of the third-quarter GDP print and a batch of September activity data due at 02:00 GMT on Sunday.

Month-on-month, the drop in new home prices eased to 0.14% from 0.17% in August. The annual drop slowed to 2.8% from 3.0%. For existing homes, the monthly decline reduced to 0.26% from 0.31%.

The numbers confirm prices are still falling across the board, making the improvement one of degree rather than direction. Still, the narrower drops follow targeted state support announced in late September, such as mortgage subsidies for some purchasers. The assistance arrived too late to shift September trade, so October and November data will provide a better signal on its effects.

Housing remains the biggest weight on China's domestic economy, curbing household wealth, consumer confidence, and investment. This gives the property figures an important role as context for the imminent main data.

A Reuters and AFP survey of economists puts third-quarter growth at 4.4% year-on-year, a slight increase from 4.3% in the second quarter but below Beijing's 2026 objective of 4.5% to 5.0%. Quarter-on-quarter growth is seen rising to 1.1% from 0.9%.

September's activity data is expected to show a familiar pattern. Industrial production is likely to expand around 5.3% to 5.5% year-on-year, up from 5.2% in August, helped by robust exports of AI-related hardware. Retail sales growth is forecast below 1%, barely better than August's 0.4%. Fixed asset investment is expected to contract by roughly 7.5% in the year to date, with some estimates putting property investment down as much as 27% from a year earlier.

Higher energy costs from the US conflict with Iran add a further headwind for the largest crude importer globally.

Weak domestic data would ramp up the call for Beijing to accelerate stimulus, with Tuesday's loan prime rate decision the next key policy moment. Goldman Sachs said a second straight quarter of growth below 4.5% would raise pressure on officials.