BEIJING, (Reuters) – China’s home prices stalled in March for the second consecutive month, according to official data. This was due to growing COVID-19 locking downs that drained consumer confidence and weighed down demand.

Based on the National Bureau of Statistics data, Reuters calculated that the average monthly new home price in China’s 70 largest cities remained stable month-on–month in March.

New home prices increased 1.5% year-over-year. It was the slowest increase since November 2015. This pace is down from the 2.0% rise recorded in February.

More than 60 cities have relaxed curbs for home buyers to aid the weak property market. This is after Beijing’s push to decrease developers’ high levels of debt pushed it into a severe chill in 2021’s second half.

However, there were some positive signs in January. But a rise in Omicron cases has caused a cooling of demand.

China’s State Council (or cabinet) stated Wednesday that additional policy measures were needed to boost the economy. However, analysts remain unsure whether rate cuts will quickly reverse the slump, as long as there is strict COVID-19 compliance.

China’s largest commercial city, Shanghai, is experiencing the worst epidemic since the virus was discovered in Wuhan late 2019. The outbreak has been causing more than 20,000 deaths per day and has prompted unprecedented levels of lockdown across the country. Numerous other cities are under partial lockdown or complete lockdown.

In March, transactions by value of newly built homes in Shanghai slumped 27% from a month earlier to 36.2 billion yuan ($5.68 billion)，finiancial magazine Yicai said.

Nomura analysts stated in Wednesday’s note that new home sales volume was down by 55.6% in April in the 30 cities studied by Wind in the first 12 Days.

($1 = 6.3739 renminbi)