BEIJING (Reuters) – China’s new home prices in January fell by less than in the previous month, data released by a private-sector reseatch firm showed on Tuesday, pointing to slightly improved sentiment in the property market.

New home prices in 100 cities fell 0.01% in January from a month earlier, after a 0.02% drop in December, according to data from China Index Academy, one of the country’s largest independent real estate research firms.

The sector is facing headwinds as regulatory borrowing curbs imposed in 2020 led to some developers defaulting on offshore debt obligations, and there has been a selloff in developers’ bonds and stocks, and cuts in their credit ratings.

In recent months, Beijing took steps to restore stability in the sector by lowering mortgage rates, offering subsidies and urging banks to provide appropriate lending to developers.

China is now drafting rules to make it easier for property developers to access much-needed funds from prepayments placed in escrow, and there are plans to exempt credit used for distressed acquisitions from regulatory debt caps.

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