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House prices increase in more cities
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MORE Chinese cities saw house prices rise in May with first-tier cities continuing to lead gainers, figures from the National Bureau of Statistics showed yesterday.
Month-over-month increases in new home prices were registered in 20 cities last month, compared with 18 in April. Prices remained flat in seven and dropped in 43, compared with four and 48 in April, said the bureau, which tracks house prices in 70 cities across the country.
Average prices climbed 0.2 percent from April, the first rise since May 2014, according to Reuters calculations based on the official data.
“The average price of new homes in the 70 cities rose at a faster pace in May, mainly fueled by notable gains recorded in first-tier cities,” said Liu Jianwei, a senior statistician at the bureau. “And we’ve seen even more divergent performances in different-tier cities with generally stable prices in second-tier ones and further declines in the majority of tertiary cities.”
Shenzhen in Guangdong Province saw a month-on-month growth of 6.7 percent, followed by a 2.6 percent gain in Shanghai — a 27-month high for the city — and a 1.4 percent rise in both Beijing and Guangzhou.
May’s rebound suggests that a property downturn across the country is bottoming out after a barrage of stimulus measures from the central bank and local governments since late last year, Reuters said.
Economists, however, warned that massive inventories of unsold homes could continue to drag on the world’s second-largest economy well into next year, discouraging new investment and construction.
“Inventories in first-tier cities are back to healthy levels ... but in third and fourth-tier cities it will take at least two more years,” said Rosealea Yao, economist at Gavekal Dragonomics based in Beijing.
Lu Qilin, a researcher at Shanghai Deovolente Realty Co, said: “Loosening policies introduced by the government a few months ago, coupled with speculation that Shenzhen could become the fifth municipality (a province-level city under direct jurisdiction from the central government) in the country, jointly lifted transactions there while robust sales in the luxury segment, or a structural shift, led to the rather significant growth in Shanghai.”
In the existing home market, 37 cities recorded price increases from a month earlier, an increase of nine from April.
Five cities saw prices remain unchanged while another 28 suffered setbacks, compared with eight and 34, respectively, in the previous month, the bureau said.
On an annual basis, prices continued to drop in all cities except Shenzhen, where a 7.7 percent annual rise was recorded for new homes.
In the existing home market, meanwhile, Shenzhen, Beijing and Shanghai were the only three cities to show gains with prices rising 9.1 percent, 3.5 percent and 0.6 percent, respectively, from same period a year ago, the bureau said.
Weighed down by the cooling property market and sluggish demand at home and abroad, China’s economic growth slowed to a six-year low of 7 percent in the first quarter and recent data showed weakness persisted into the second quarter, putting more pressure on the government to step up policy stimulus.
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