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April 19, 2018

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Stable month for China house prices

HOUSING prices remained largely stable in major Chinese cities in March amid tough government purchase restrictions.

Data released yesterday by the National Bureau of Statistics showed that in the country’s four first-tier cities, Shenzhen recorded a 0.1 percent decline in new home price from a month earlier. Beijing, Shanghai and Guangzhou prices climbed 0.1 percent, 0.2 percent and 0.2 percent respectively.

In February, all four first-tier cities recorded price falls between 0.2 percent and 0.6 percent from January.

On a year-on-year basis, new home prices in the first-tier cities declined 0.6 percent last month, while prices of pre-owned houses in these cities went down 0.1 percent.

“Housing prices were generally stable as market controls have continued to take effect,” said Liu Jianwei, a senior statistician at the bureau, which tracks property prices in 70 Chinese cities.

“Nationwide, differentiated measures to regulate the residential property market continued to be implemented, showing consistency and continuity in government policies.”

Seven of the 15 “hottest” cities with regard to the property market, including both first and second-tier cities, saw declines of 0.1 to 0.4 percent in new home prices from February. Prices in Tianjin and Hefei were flat, and the rest recorded minor increases of 0.1 to 0.2 percent.

On an annual basis, new home prices in nine of the 15 cities shed between 0.3 percent and 2.3 percent, and the remainder recorded rises of 0.1 to 1.2 percent.

Among the 70 cities, new home prices in 10 of them fell month on month, a decrease of six from February. In the pre-occupied housing market, seven cities posted price declines, a drop of eight from February.

“Notably more cities around the country witnessed monthly price growth in both new and existing housing markets in March,” Shanghai Homelink Real Estate Agency wrote in a report.

“That was partially because of some seasonal factors as the domestic housing market finally started to pick up some strength amid improving momentum among buyers following the Spring Festival holiday in February.”

The data came after the statistics bureau released on Tuesday that China’s investment in property development expanded 10.4 percent year on year in the first quarter of 2018, accelerating from an increase of 7 percent registered in 2017. Total investment in the real estate sector stood at 2.13 trillion yuan (US$340 billion) in the first quarter.

“The double-digit growth beat market expectations,” said Xia Dan, senior researcher of the Bank of Communications, noting that the construction of rental housing and affordable housing partly contributed to the growth.

During previous years, rocketing housing prices, especially in major cities, had fueled concerns about asset bubbles. To curb speculation, local governments passed or expanded their restrictions on house purchases and increased minimum down payments required for mortgages.

In addition, China is moving faster to implement a long-term mechanism for property regulation that ensures supply through multiple sources, provides housing support through multiple channels, and encourages both housing purchases and rentals.

This year’s government work report reiterated that “houses are for living in, not speculation.”

The report added: “We will support people in buying homes for personal use, and develop the housing rental market and shared ownership housing.”

So far, 51 state-owned home renting companies have been set up in 12 pilot cities, where government-led rental management and service platforms were established.

For 2018, the government pledged to maintain stability and consistency of property regulatory policies and accelerate establishing the long-term mechanism for real estate regulation.

“China will not waver in its efforts to implement property market regulation, and will maintain continuity and stability of policies in 2018,” said Wang Menghui, minister of housing and urban-rural development.




 

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