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Housing market remains lackluster
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HOUSING prices in China remained weak for the third straight month with over three-fourths of the cities registering month-on-month declines, a report released yesterday by China Index Academy showed.
The average price of new homes in 100 cities fell 0.81 percent from June to 10,835 yuan (US$1,753) per square meter in July, the academy said. The price fell by 0.5 percent in June and 0.32 percent in May, which was the first monthly retreat since June 2012.
“Due to tightened credit at commercial banks as well as uncertain expectations from the industry, the country’s residential property market has been losing its steam since the beginning of this year amid a lackluster sentiment among homeseekers,” the academy said. “In the second half, with more cities expected to lift their home purchase restrictions, the domestic housing market might be boosted.”
More than 20 cities have so far lifted the cap on the number of homes each household is allowed to buy as local governments step in to fight the slack in property sales that is posing a threat to a stable economy.
Nationwide, 76 of the 100 cities monitored by the academy recorded price drops, compared with 71 in June. Of these, 39 cities posted drops of over 1 percent, an increase of four from a month earlier. In the 10 largest cities, the average price of a new home fell 0.97 percent to 19,328 yuan per square meter in July, compared with a 0.45 percent decrease in June and a 0.18 percent dip in May.
Guangzhou led all with a 1.77 percent month-over-month loss, while prices in Shanghai, which was the only city among the 10 that saw a monthly rise in June, registered a milder retreat of 0.45 percent.
Year on year, 52 cities recorded price decreases last month, compared with 37 in June. Wenzhou continued to lead decliners with a drop of 12.4 percent.
A separate report released yesterday mirrored the same trend. New home sales in Shanghai fell 1.8 percent from June to 701,000 square meters in July while average cost of new houses dipped 0.8 percent to 26,345 yuan per square meter, according to Shanghai Uwin Real Estate Information Services Co. New home supply, meanwhile, totaled 946,600 square meters last month, outnumbering sales for the third consecutive month.
“More real estate developers are likely to provide larger discounts as early as this month instead of waiting till September and October amid high inventories in the market,” said Huang Zhijian, chief analyst at Uwin. “After all, whether banks can loosen credit and developers can offer attractive deals are critical for a rebound in property transactions.”
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