China’s new home price growth slows on govt curbs

BEIJING: China’s new home price growth slowed in February from the previous month as a raft of government curbs aimed at tempering speculative demand softened prices in the biggest cities, although strength seen in smaller centres remained intact.

Average new home prices in China’s 70 major cities rose 0.2% in February from the previous month, compared with an increase of 0.3% in January, Reuters’ calculations from National Bureau of Statistics (NBS) data yesterday showed.

Compared with a year ago, they rose 5.2% in the month, picking up from a 5% increase in January.

Prices fell in China’s top-tier cities after they stabilised in January, the NBS said in a statement accompanying the data.

Shenzhen’s new home prices fell 0.6% month-on-month, after it stabilised in January. Beijing prices declined 0.3% after posting a 0.2% increase in the previous month, data showed.

“I think the policies currently in place (to curb speculation) are effective in a way that they made prices fall slightly in prime markets,” said ING economist Iris Pang.

“But they also result in a spillover effect that drives buyers who can’t afford in those big cities to less expensive markets, which will continue to push up prices,” she said, adding that she doesn’t expect significant price falls in the biggest cities, despite the curbs. – Reuters