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China’s housing prices see further moderation in October

By Cherry Cao | November 18, 2016, Friday | Online Edition

CHINA'S first and second-tier cities are witnessing confirmed signs of cooling in October with notable slowdown of home price growth in both new and existing markets, thanks to implementation of tightening measures by local governments to rein in speculation, the National Bureau of Statistics said today.

On average, new home price rose 0.5 percent and 1.3 percent, respectively, last month from September in first and second-tier cities, compared with September's 3.3 percent and 2.3 percent monthly gain, according to the bureau, which tracks housing prices in new and pre-owned markets across 70 cities.

In the pre-occupied market, home cost climbed by an average 0.6 percent and 0.8 percent, respectively, from a month earlier in first and second-tier cities, also down from the monthly rise of 3.5 percent and 2.9 percent recorded in September.

"Residential markets in both first and second-tier cities cooled down in October while third-tier ones remained rather stable," said Liu Jianwei, the bureau's senior statistician. "On a year-over-year basis, price growth in first and second-tier cities also increased at a slower pace."

Shenzhen was the only one in the four gateway cities that suffered home price declines. Both new and existing home price in Shenzhen fell 0.5 percent month on month in October, compared with the 1.9 percent and 1.8 percent gain recorded a month earlier. The rest three cities, namely Beijing, Shanghai and Guangzhou, all registered a slower growth of 0.3 percent, 0.2 percent and 0.8 percent, respectively, notable retreat from their 4.9 percent, 3.2 percent and 3.1 percent increase, respectively, in September, the bureau's data showed.

"A shift in government policy led to the latest turnaround in the housing market, which we believe should last for at least six to nine months," Centaline Property, a major realty chain, said in a note released today. "In general, home price in cities where further rein-in measures have been implemented lately could possibly see a drop of more than 10 percent."

About 22 cities across the country have introduced tightened measures since late September ranging from limiting the number of homes people are eligible to buy to higher down payment to combat soaring property price that may trigger bubbles dangerous to the country's economic development.

Buying sentiment in the 22 cities has plunged some 40 percent on average in October from a month earlier, according to the Centaline note.

Nationwide, new houses worth 941.2 billion yuan (US$136.3 billion) were sold across the country last month, down from 1.15 trillion yuan sold in September. The area of new home purchases fell to 132.6 million square meters from 155.7 million square meters during the same period, the bureau said earlier this week.

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