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Record number of cities' home prices fall
By Cherry Cao |
June 19, 2012, Tuesday
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Print Edition
Print Edition
A RECORD number of Chinese cities registered year-on-year declines in home prices in May as real estate developers trimmed profits to boost sales, according to National Bureau of Statistics data released yesterday.
Excluding government-subsidized affordable housing, prices fell last month in 55 of 70 cities tracked by the bureau, compared with 46 cities that saw year-on-year declines in April. On a month-on-month basis, meanwhile, 43 cities had drops in the price of new residential property in May, while six registered growth and the rest were flat.
"The continuous rise in the number of cities recording year-on-year losses in home prices was a result of developers' price-cutting campaigns offered across the country over the past few months," said Sky Xue, an analyst with China Real Estate Information Corp. "However, while transactions of new residential properties also picked up accordingly, we're expected to see the trend come to an end soon, probably before the end of the third quarter, as the market is approaching its bottom, with some developers already starting to raise their prices amid improving sentiment."
Sales of new homes shed 13.5 percent year on year to 255.52 million square meters across the country between January and May, compared with a 14.9 percent annual drop recorded during the first four months of this year, the statistics bureau said earlier this month. By value, they fell 10.6 percent to 1.4 trillion yuan (US$221 billion) from the same period a year earlier, compared with a yearly decline of 13.5 percent registered during the January-April period.
In Shanghai, Beijing, Guangzhou and Shenzhen, where home purchase restrictions have been vigorously enforced, new home prices lost between 1.6 and 2.3 percent in May from a year earlier. That compared to a retreat of between 1.2 percent and 1.7 percent in April.
Month on month, the four gateway cities lost strength for the eighth consecutive month, down in home value by between 0.1 percent and 0.3 percent, according to the bureau's report.
Excluding government-subsidized affordable housing, prices fell last month in 55 of 70 cities tracked by the bureau, compared with 46 cities that saw year-on-year declines in April. On a month-on-month basis, meanwhile, 43 cities had drops in the price of new residential property in May, while six registered growth and the rest were flat.
"The continuous rise in the number of cities recording year-on-year losses in home prices was a result of developers' price-cutting campaigns offered across the country over the past few months," said Sky Xue, an analyst with China Real Estate Information Corp. "However, while transactions of new residential properties also picked up accordingly, we're expected to see the trend come to an end soon, probably before the end of the third quarter, as the market is approaching its bottom, with some developers already starting to raise their prices amid improving sentiment."
Sales of new homes shed 13.5 percent year on year to 255.52 million square meters across the country between January and May, compared with a 14.9 percent annual drop recorded during the first four months of this year, the statistics bureau said earlier this month. By value, they fell 10.6 percent to 1.4 trillion yuan (US$221 billion) from the same period a year earlier, compared with a yearly decline of 13.5 percent registered during the January-April period.
In Shanghai, Beijing, Guangzhou and Shenzhen, where home purchase restrictions have been vigorously enforced, new home prices lost between 1.6 and 2.3 percent in May from a year earlier. That compared to a retreat of between 1.2 percent and 1.7 percent in April.
Month on month, the four gateway cities lost strength for the eighth consecutive month, down in home value by between 0.1 percent and 0.3 percent, according to the bureau's report.
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