Hous­ing price growth in key cities slows for ninth month

China Daily (Hong Kong) - - BUSINESS - By WU YIYAO in Shang­hai wuyiyao@chi­nadaily.com.cn

The growth of home prices in China’s key cities slowed for nine con­sec­u­tive months to end of June, with prices in the cap­i­tal ac­tu­ally fall­ing, as the coun­try’s moves to cool the res­i­den­tial hous­ing mar­ket con­tin­ued to gain trac­tion, ac­cord­ing to of­fi­cial data.

The Na­tional Bureau of Sta­tis­tics re­ported that av­er­age home prices in Bei­jing fell for the first time in more than two years in June. It said Shang­hai prices de­clined 0.2 per­cent month-on-month, while Shen­zhen home prices stalled in June, and Guangzhou’s grew 0.5 per­cent, which was lower than the 0.9 per­cent gain in May.

“China’s 15 hottest prop­erty mar­kets, mostly first and sec­ond-tier cities, re­mained sta­ble in June as a city-based prop­erty pol­icy con­tin­ued to take ef­fect,” the NBS said in a state­ment ac­com­pa­ny­ing the data.

The price growth of newly built res­i­den­tial prop­er­ties in key cities in China slowed down in June, and home prices in some 90 per­cent of the 70 cities mon­i­tored saw month-on- month de­clines or stayed un­changed, ac­cord­ing to the monthly re­port on home prices across China by the NBS.

Liu Jian­wei, se­nior statis­ti­cian at the NBS, said city-spe­cific poli­cies have been tak­ing ef­fect across China.

More than 40 cities have launched a wide range of mea­sures to cool down over­heat­ing in the home mar­ket since Oc­to­ber last year, in­clud­ing higher down pay­ment re­quire­ments for buy­ers of sec­ond homes, and restric­tions on re­selling homes.

“On a year-on-year com­par­i­son, in all of the 15 key cities, in­clud­ing first-tier and some re­gional gate­way sec­ond-tier ones, prices de­clined in June by some­where be­tween 0.8 per­cent and 5.5 per­cent,” Liu said.

Liu added that com­pared with the pre­vi­ous month of May, home prices in nine cities dropped and prices in six cities gained, but growth in the lat­ter was be­low 0.5 per­cent.

Smaller cities, how­ever, are ex­pe­ri­enc­ing ris­ing home price as buy­ers — who see res­i­den­tial prop­er­ties as in­vestable as­sets — switch from cities with home pur­chase re­stric- tions to cities without the curbs, and de­vel­op­ers also eye more af­ford­able land parcels in lower-tier cities.

The sta­tis­tics showed that 20 cities in June ex­pe­ri­enced new home price month-on­month growth of more than one per­cent, while 14 cities saw pre-owned home growth of more than one per­cent against May.

“All of these cities are lower-tier cities which are show­ing ob­vi­ous spillover ef­fects, “said Zhang Dawei, chief an­a­lyst with Cen­taline Prop­erty, the prop­erty ser­vices provider.

Zhang said in large cities, de­vel­op­ers are also ad­just­ing their strate­gies with some al­lo­cat­ing more re­sources to leas­ing projects.

“High-end ser­viced apart­ments have con­tin­ued to out­per­form the mar­ket, and we ex­pect de­mand will grow as de­mo­graphic changes in large cities show grow­ing num­bers of mo­bile, young tal­ent who wish to stay in leas­ing projects in­stead of buy­ing prop­er­ties,” said Fran­cis Ye­ung, gen­eral man­ager of sales and mar­ket­ing at real es­tate de­vel­oper K. Wah China.

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