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Measures to curb rising prices stabilize China’s property sector
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CHINA’S hot property market in major cities continued to stabilize in January after authorities took a series of measures to contain rising prices, official data showed yesterday.
The average new home prices were flat last month in first-tier cities for the second consecutive month and edged up 0.1 percent in second-tier ones but the gain was down from a 0.2 percent growth in December, said the National Bureau of Statistics, which monitors prices in new and pre-owned housing markets in 70 major cities.
“Residential prices continued to stabilize in the 15 top cities as differentiated tightening measures to cool the overheated market were strictly implemented,” said Liu Jianwei, the bureau’s senior statistician. “Home prices in first and second-tier cities almost stopped growing while those in tertiary ones remained steady.”
Guangzhou was again the only one of the 15 top cities to post monthly price growth in January when new home prices rose 0.6 percent. Prices were flat in three cities while the remaining 11 saw month-on-month price drops.
In Beijing, new residential house prices remained flat month on month, while Shanghai prices fell 0.1 percent. Prices in Shenzhen slid 0.5 percent.
In third-tier cities, new home prices gained 0.4 percent in January from December — a positive signal for a recovery.
“That could be a good sign because stable property prices would help cut inventories — a top priority for governments in tertiary cities,” said Xia Yu, senior researcher at BOCOM Financial Research Center. “Year on year, new home prices in tertiary cities also climbed faster, compared with continuing slower growth in first and second-tier cities.”
China’s leaders have pledged to strictly limit credit flowing into speculative buying in the housing market and curb asset bubbles in 2017.
At the Central Economic Work Conference in December, policy-makers called for comprehensive measures to build a market-oriented and long-term mechanism that could curtail property bubble and prevent big market fluctuations.
In cities where prices are rising fast, governments should increase land supply and the share of residential housing, according to a statement released after the conference.
“The effect of the weeklong Spring Festival holiday caused anemic sales volume, and government measures to contain price rises in major cities amplified the effect,” said Xia Dan, a senior researcher at Bank of Communications, one of China’s five biggest lenders.
Zhang Dawei, chief analyst with property information provider Centaline, said measures such as purchase limits and tightened mortgage restrictions were effective as new residential house prices in major cities grew more slowly compared with pre-owned homes.
He forecast that growth of new home prices would continue to slow in the future.
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