China's residential property prices continued to decline in August, with used homes experiencing a sharper drop compared to new properties, according to data from the National Bureau of Statistics released on Tuesday. New-home prices across 70 cities decreased by 0.17% from July, a slight improvement from the previous month's 0.18% decline. Meanwhile, resale home prices, which are less regulated by the government, fell 0.31%, marking an acceleration from the 0.29% drop in July.

The sustained five-year downturn in China’s property sector has dampened domestic demand, a key driver for the country’s economic growth. In response, Beijing introduced a series of policy adjustments on August 28 aimed at stabilizing the housing market. These measures include phasing out the widely used pre-sale model, under which developers sell properties before construction completion—a practice that has contributed to market instability.

The reforms also encourage property developers to offer fully completed homes for sale and provide new avenues for raising capital through equity and bond issuance. However, analysts say the recent changes are structural reforms rather than immediate economic stimulus, suggesting that any improvement in market confidence and demand is likely to materialize gradually.

Moody’s Ratings analysts, led by Lillian Li, noted in a recent report that while the policy package may have limited impact on short-term sales, it could help rebuild long-term confidence in the housing sector. Because the policy shift was implemented after the August data collection period, the current figures do not yet reflect its influence.

Overall, the Chinese government’s efforts highlight a recognition of the housing market’s critical role in the broader economy, as officials seek to address deep-seated challenges while avoiding a sharp rebound in instability.