Hous­ing prices be­gin to sta­bi­lize, hard land­ing ‘un­likely’

China Daily (USA) - - CHINA -

By WU YIYAO \ in Shang­hai wuyiyao@chi­nadaily.com.cn Home price in­creases in key cities may ease af­ter a se­ries of cool­ing mea­sures take ef­fect, though a hard land­ing of the mar­ket is un­likely, said an­a­lysts. New home prices in 63 out of 70 cities that the Na­tional Bureau of Sta­tis­tics mon­i­tors gained in Septem­ber. But the real es­tate mar­ket “ap­par­ently cooled” this month af­ter cities took mea­sures to curb rapidly ris­ing hous­ing prices, ac­cord­ing to a state­ment by the NBS on Fri­day. Liu Jian­wei, spokesman for the NBS, said growth in res­i­den­tial prop­erty prices that was too rapid in first-tier cities and some se­cond-tier cities has ap­par­ently been curbed, and home prices are sta­bi­liz­ing. Com­pared with Septem­ber, new home price growth has slowed this month. Year-on-year growth in floor area un­der con­struc­tion also has slowed, from 4.6 per­cent in Au­gust to 3.2 per­cent in Septem­ber.

Shen­zhen, one of the cities with the fastest hous­ing price growth, saw av­er­age new home prices de­cline by 0.3 per­cent in the first half of Oc­to­ber com­pared with Septem­ber.

Prices in some other cities dropped be­tween 1 per­cent and 3.8 per­cent, the NBS state­ment said.

More than 20 cities launched cool­ing mea­sures, in­clud­ing stricter reg­u­la­tions on buy­ers’ qual­i­fi­ca­tions to buy se­cond or third homes and tight­ened credit for home­buy­ers in a bid to curb spec­u­la­tion. How­ever, an­a­lysts said they be­lieve a hard land­ing in the key cities’ prop­erty mar­ket is un­likely.

“Pol­icy changes will re­main grad­ual and fo­cused on up­pertier mar­kets, mean­ing that a prop­erty mar­ket crash is highly doubt­ful,” said Sam Xie, head of CBRE China Re­search.

Wang Tao, chief China econ­o­mist of UBS Group AG, said in a re­search note that the chances of a home-price plunge are low. “These curbs only aim to rein in the home­buy­ing panic and to stem the bub­ble, in­stead of be­ing an al­laround shack­ling of the prop­erty mar­ket,” said Wang.

James McDon­ald, a Sav­ills China re­searcher, said low­ertier cities may see de­creas­ing prices due to in­ven­tory pressure.

Price in­creases in first-tier cities such as Bei­jing and Shang­hai will slow down but are un­likely to stop if the land sup­ply does not pick up quickly, he said.

Av­er­age home prices in Wen­zhou, Zhe­jiang province, dropped by 3.62 per­cent, from 18,093 yuan ($2,670) per square me­ter in Septem­ber to 17,438 yuan in the first half of Oc­to­ber.

In Harbin, cap­i­tal of Hei­longjiang province, home prices dropped by 1.23 per­cent, from 7,837 yuan per square me­ter in Septem­ber to 7,740 yuan in Oc­to­ber, ac­cord­ing to data from hous­ing au­thor­i­ties.

In Shang­hai, the av­er­age home price went up by 3.41 per­cent month-on-month in the first half of Oc­to­ber to 49,644 yuan per square me­ter.

Pol­icy changes will re­main grad­ual and fo­cused on up­per-tier mar­kets.” Sam Xie, head, CBRE China Re­search

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