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New house prices slide in 35 cities in May
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NEW home prices in 35 Chinese cities fell in May from the previous month as the country’s property market continued to cool, according to a report issued yesterday by the National Bureau of Statistics.
In April, prices declined in just eight of the 70 cities monitored by the bureau.
Prices were flat in 15 cities last month and rose in 20.
The latest data show that the average price of a new home in the 70 cities fell 0.2 percent in May, the first month-on-month decrease since June 2012.
On a year-on-year basis in May, home prices rose in 69 of 70 the cities. It was the 13th straight month in which all but one of the cities saw an increase.
Wenzhou in Zhejiang Province remained the only city to register a decline, with prices down 4.8 percent year on year.
Tier-1 cities continued to lead the price rises, though at a slower rate. Across the country, prices rose 5.6 percent year on year in May, down from 6.8 percent in April.
“Supply exceeding demand and a tighter monetary policy contributed to the adjustment,” Zhu Haibin, chief economist for China at JPMorgan, said in a note yesterday.
Shanghai saw the biggest gains in the month, with an 11.3 percent rise from a year earlier. It was the seventh straight month the city led the nation.
According to Zhu’s note, new home starts totaled 1.5 billion square meters in 2013, compared with home sales of 1.2 billion square meters in the same period the year before.
The central bank began to tighten monetary policy in the second half of 2013, prompting a slowdown in social financing from a 20.4 percent annual growth in June 2013 to 15.8 percent in May 2014.
The major funding source for real estate developers — shadow banking activity such as trust loans — was the most affected by the change. As a result, developers have faced higher funding costs and more restrictive credit availability, Zhu said.
In the existing home market, the survey said prices in May fell in 35 of the 70 cities from April, and rose in 19.
On an annual basis, gains were seen in 64 cities, and declines were registered in five.
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