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Survey finds housing prices in 100 major cities continue to fall
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FALLS in Chinese house prices decelerated in March from the previous month, a survey showed yesterday after authorities loosened mortgage and tax policies as growth in the world’s second-largest economy slows.
The average price of a new home in China’s 100 major cities edged down 0.15 percent from February to 10,523 yuan (US$1,697) per square meter, the China Index Academy said in a statement.
The decrease slowed from a drop of 0.24 percent in February, according to the academy’s data.
Home prices had been declining for eight straight months until a tepid increase of 0.21 percent was recorded in January, the academy’s figures showed, as the market in second-tier and smaller cities became saturated.
In a move to support the market, the government on Monday lowered minimum down payment levels on second homes nationwide, rolling back a four-year-old policy first introduced to try to cool the then red-hot property market as rocketing prices put homes out of the reach of many.
It also shortened the ownership period during which sellers are liable to a 20 percent capital gains tax on properties other than their main home.
The academy indicated that the loosening was almost as strong as those introduced in 2009 when China’s property market took a hit from the global financial crisis.
“Looking forward, various policies to stabilize consumption linked to the real estate sector have been introduced. They will strongly stimulate (sales) and help the market develop in a stable and healthy way,” it said in the statement.
Monday’s policy relaxation came after the central bank eased mortgage policies in September. It has also cut interest rates twice since November and in February lowered the bank reserve ratio — the percentage of funds banks must hold in reserve.
China’s gross domestic product grew 7.4 percent last year, the slowest in nearly a quarter of a century, and key indicators released more recently pointed to further downside risks.
Analysts expect that policy-makers will have to ease monetary policy further to boost economic growth.
Property investment is a key driver for China’s economy, while land sales are a major source of revenue for cash-strapped local governments, which have been feeling the pinch as the economy has slowed.
On a year-on-year basis, housing prices fell 4.35 percent in March, accelerating from the decline of 3.84 percent a month ago, according to the academy.
The average price in the top-10 cities was at 18,938 yuan per square meter, down 3.19 percent from a year ago.
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