Regulations succeed in curbing urban apartment prices: NBS
The overheated domestic property market has been effectively regulated as surging home prices have been curtailed and speculative purchases curbed, National Bureau of Statistics ( NBS) spokesman Mao Shengyong told a press conference on Monday in Beijing.
China’s investment in property development increased 7.9 percent year-on-year in the first seven months of this year, down from 8.5 percent growth in the first half, data from the NBS showed Monday.
The slowdown was mainly due to weather conditions. High temperatures or floods during the summer can have some impact on construction, but overall, the trend is steady, Mao said.
“The current tightening in credit policy has also ratcheted up pressure on financing for property companies, resulting in the reduced growth rate in investment,” Yan Yuejin, a research director at the Shanghai-based Ehouse China R& D Institute, told the Global Times Monday.
Sales of commercial residential buildings reached 6.8 trillion yuan ($ 1.02 trillion) during the period, up 18.9 percent year- onyear, with the growth rate down 2.6 percentage points from a year earlier, the NBS data showed.
Given the current numbers, China’s housing market has been effectively cooled and de leveraging has made progress, Yan said, noting that strict regulations in major cities have contributed a lot by restraining demand.
“Insufficient inventories have emerged as a problem for property markets in major cities. If more apartments can be supplied in the future, demand and transactions are likely to rise,” Yan noted.
The average sales price of new apartments in Beijing was 48,463 yuan per square meter in July, up 12 percent month- onmonth. The rise should be tackled by implementing regulations strictly, according to a report released by E-house China R& D Institute on Sunday.
The housing market will become divided as first-and secon d-tier cities will still face much pressure from rising prices while third- and fourth- tier cities will have large unsold inventories, experts said.
A white- collar worker surnamed Jin, who is based in Wuhan, capital of Central China’s Hubei Province, told the Global Times on Monday that he bought a new apartment costing more than 15,000 yuan per square meter in the main district of Wuhan at the end of July. “I think home prices will rise because the city has enormous development potential,” Jin said.
“Rising from less than 10,000 yuan on average since the start of last year, Wuhan’s new home price doubled at the end of 2016,” Jin said, noting this year’s price increase was effectively regulated yet still growing mildly.
“New homes have been continuously in demand in Wuhan since last year. The number of new homes in the market was reduced in the first half of the year, leading to an imbalance between supply and demand,” he said.
Local governments are expected to strengthen their efforts to control local housing markets, and efforts to cut inventories of commercial residential buildings should be further advanced, said Mao, the NBS official.
Another factor is interest rates. Chinese banks have lowered discounts on lending rates for first-time home buyers. The average mortgage rate across the nation was 4.99 percent in July, 2 percent above the official benchmark rate, according to a report released by financial information provider rong360. com on Friday.
About 20 listed Chinese property companies reported a month- on- month drop in sales in July, domestic news site stcn. com reported on August 7. Total sales of those companies stood at 165.79 billion yuan, down 31.6 percent month- on- month.