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House prices still falling, but more slowly
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HOUSE price across China continued to decline, but at a slower pace, in December amid improved sentiment among buyers, according to the latest survey.
Price drops were registered in 66 cities last month, compared to 67 in November. Prices were flat in three, unchanged from a month earlier, and they rose only in Shenzhen in the south, the National Bureau of Statistics, which tracks house prices in 70 major cities, said yesterday.
“New home sales in the 70 cities climbed almost 9 percent in December, mainly boosted by revised mortgage policies by local governments, interest rate cuts by the central bank as well as developers’ ambitious plans to reduce inventory during the year-end period,” said Liu Jianwei, the bureau’s senior statistician. “That helped prevent home prices from shedding at a faster rate.”
In December, the price of new and pre-owned houses in the 70 cities fell by an average 0.2 percent and 0.3 percent, respectively, from November. That compared to an average decline of 0.4 percent and 0.5 percent in November.
New home prices in Luzhou, in southwest China’s Sichuan Province, fell 1.3 percent from November to lead the drop nationwide. That compared with a maximum 1.4 percent decline in November and 1.6 percent drop in October, according to bureau figures.
While second and third-tier cities continued to register price declines, though at a slower rate, the four first-tier cities saw average prices grow in both new and existing home markets last month.
Rises in first-tier cities
In Shanghai, Beijing, Guangzhou and Shenzhen, where new home purchases all rose more than 15 percent in December from November, prices of new and existing houses climbed by 0.1 percent and 0.4 percent on average, bureau figures showed.
On an annual basis, new home prices in 68 of the 70 cities declined, unchanged from November. The prices of pre-owned homes fell in 67 cities from a year earlier, also the same as in November, the bureau said.
China Vanke, China’s top listed residential developer, reported a 129 percent surge in sales in December from a year earlier, Reuters reported, while sales over the same period for mid-sized Country Garden leapt 167 percent.
But Wang Jun, senior economist at China Centre for International Economic Exchanges, told Reuters: “The oversupply fundamentals of China’s property market have not been changed even though sales improved.
“Developers are not so confident on the property market outlook. That’s why property investment growth continued to drop in the past months. No doubt the slowdown of the property market will continue to drag on the broad economy in 2015.”
Property researcher CRIC concurred, saying housing supply remains excessive despite the pick-up in sales, with only two major cities out of 23 it studied seeing a decline in inventory at the end of December.
“In most Tier 2 or Tier 3 cities, inventory destocking remains the main task for local property markets in 2015,” Liu Yuan, the head of research at Shanghai property consultant Centaline, told Reuters.
Despite falling prices and a stock overhang, several developers say they will launch more housing projects in 2015 as they strive to meet sales targets and boost market share, at the risk of adding to already-bloated inventories.
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