(Bloomberg) -- China home prices fell the most in almost nine years in December, underscoring why officials are extending support to the biggest cities to end the property crisis. 

New-home prices in 70 cities, excluding state-subsidized housing, dropped 0.45% last month from November, when they declined 0.37%, National Bureau of Statistics figures showed Wednesday. The decrease was the steepest since February 2015. The second-hand market didn’t fare any better, with prices sliding 0.79%, the same pace as the previous month. 

China’s extended property downturn has been a major headwind for the economy and ratcheted up pressure on developers that are struggling to repay debts and complete projects. It’s sparked a raft of moves from authorities to stem the downward spiral, including relaxing homebuying curbs last month in Beijing and Shanghai, two of the country’s biggest housing markets. 

“Easing measures in Beijing and Shanghai have warmed up sales there, but the overall effect turned out to be worse than expected,” said Chen Wenjing, research director China Index Holdings. “The crux is that demand remains sluggish, and shaky confidence on household income refrains homebuyers from adding leverage.”

A Bloomberg gauge of Chinese developer stocks fell as much as 3.3% after the figures were released, touching its lowest since March 2009. 

To boost confidence, the government has also signaled stronger support to stanch developers’ funding woes. Financial firms are responding to lending tasks the government set out earlier, with Ping An Bank Co. putting 41 developers on a list of builders eligible for its funding support, Bloomberg reported this week. Authorities also recently called on local governments to better ease developers’ financing needs, including drafting a list of projects eligible for funding. 

Residential sales slumped 20% in December by value from a year earlier, the sharpest decline in 12 months, according to Bloomberg calculations based on official data. Sales for the full year dropped 6% to 10.3 trillion yuan ($1.4 trillion). 

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China’s home sales will likely shrink by area further this year and the next, with 2025’s annual total plateauing at around 850 million square meters, Sheng Songcheng, a former director of the People’s Bank of China’s statistics and analysis department, said last week. That means the housing sector will likely contract another 10% before it stops being a drag on investment and economic growth.

Real estate development investment shrank 12.5% in December to the lowest monthly level in almost 11 years, calculations showed. 

The broader home market counts on Beijing and Shanghai, each with a population of about 30 million, to revive buyer confidence. Officials in the two bellwether cities last month cut downpayment requirements for first- and second-home buyers. The two cities also changed the definition of so-called non-luxury homes, effectively allowing more residences to qualify for lower mortgage thresholds. 

Yet the measures had a “limited effect” on supporting new-home prices in Beijing, which held steady last month, Chen said. Existing-home prices fell for a third month in both cities, though both at a slower pace. 

Last week, Shanghai allowed some single non-residents who have paid taxes for three years to purchase homes in two suburban districts, widening the group of prospective buyers.

--With assistance from James Mayger.

(Updates with developer stock moves, sales and investment data and more details throughout.)

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