Home prices con­tinue to rise in Novem­ber

China Daily (Hong Kong) - - BUSINESS DIGEST - By HU YUANYUAN huyuanyuan@chi­nadaily.com.cn

Ur­ban hous­ing prices climbed fur­ther last month, with the cost of buy­ing a newly built res­i­dence surg­ing by more than 20 per­cent in four ma­jor cities, the Na­tional Bureau of Sta­tis­tics said on Wed­nes­day.

Of the 70 ma­jor cities mon­i­tored by the NBS, there was only one — Wen­zhou, Zhejiang prov­ince — where prices de­clined year-on-year.

Shang­hai, with an in­crease of 21.9 per­cent, led the list. Bei­jing ranked sec­ond, with a 21.1 per­cent gain, fol­lowed by Shen­zhen (21 per­cent) and Guangzhou (20.9 per­cent).

On a month-on-month ba­sis, prices rose in 66 cities, with the largest gain com­ing in at 1.3 per­cent. Prices were flat in three cities. Over­all, 94.3 per­cent of the cities posted monthly price in­creases in Novem­ber.

The sit­u­a­tion in the pre-owned prop­erty mar­ket was very sim­i­lar.

“House price in­fla­tion has largely been driven by a re­bound in res­i­den­tial de­mand, fu­eled by ur­ban­iza­tion and strong growth in dis­pos­able in­come.

“De­mand has been ar­ti­fi­cially sup­pressed by prop­erty tight­en­ing poli­cies in re­cent years, but the im­pact has been di­min­ish­ing,” said Zhu Haibin, JPMor­gan China chief econ­o­mist.

The gen­eral eas­ing in credit con­di­tions since the sec­ond half of 2012, and the ab­sence of ad­di­tional na­tional prop­erty tight­en­ing mea­sures, also sup­ported hous­ing prices, Zhu said.

Ac­cord­ing to Nie Meisheng, for­mer head of the China Real Es­tate Cham­ber of Com­merce, China’s hous­ing prices are ap­proach­ing a peak, sim­i­lar to what hap­pened in the United States in 2005.

“It doesn’t make sense that home prices will con­tinue to go up while over­all eco­nomic growth is slow­ing down,” Nie said ear­lier this month.

In­vest­ment bank UBS AG fore­cast a 5 to 7 per­cent year-on-year home price in­crease in 2014.

“Home price growth will slow in 2014, de­pend­ing on liq­uid­ity in the mar­ket,” said Gao Ting, UBS Se­cu­ri­ties’ chief China strate­gist.

“Prices in the coun­try’s key cities, such as Bei­jing, Shang­hai, Guangzhou and Shen­zhen, are set to rise fur­ther in the next year, be­cause of ro­bust de­mand and com­par­a­tively low sup­ply. But some sec­ond- and third-tier cities may see flat or even slid­ing prices.”

Frank Chen, ex­ec­u­tive di­rec­tor of real es­tate con­sul­tancy CBRE Re­search China, held a sim­i­lar view. Home prices in first-tier cities will re­main bullish in the com­ing three to five years due to ro­bust de­mand, he said.

“Given the de­mo­graphic fig­ures in Bei­jing, for in­stance, there are still obliv­i­ous short­ages of sup­ply in the next few years, thus un­der­pin­ning high prop­erty prices,” said Chen.

Prop­erty sales are ex­pected to rise 8 to 10 per­cent year-on-year in 2014, ac­cord­ing to UBS. Sales growth, ac­cord­ing to the UBS re­port, is be­ing driven by the coun­try’s ur­ban­iza­tion push.

Pol­icy changes in a few sec­ond- and thirdtier cities re­cently demon­strated that the gov­ern­ment was look­ing at a “bot­tom-up” ap­proach.

Hence, fu­ture pol­icy di­rec­tion will be­come more mar­ket- ori­ented and spe­cial­ized, de­pend­ing on price trends and eco­nomic con­di­tions in lo­cal cities, ac­cord­ing to Gao.

Newspapers in English

Newspapers from China

© PressReader. All rights reserved.