Rein-in measures continue to cool housing market

New home sales in China slowed down to single-digit expansion in the first 10 months of this year as the domestic property market continued to cool down, data released today by the National Bureau of Statistics showed.

More than 8.55 trillion yuan (US$1.29 trillion) worth of new homes, excluding government-subsidized affordable housing, was sold between January and October, a year-on-year increase of 9.6 percent, the bureau said in a statement posted on its website. That compared with the 11.4 percent rise registered in the first three quarters.

By area, new residential properties sold in the 10-month period climbed 5.6 percent from a year earlier to 1.12 billion square meters, decelerating from 7.6 percent growth in the first 10 months, the bureau's data showed.

"Since the last quarter of 2016, when varied tightening policies were implemented in different cities, housing price growth in the 15 first and key second-tier cities have all moderated on a year-on-year basis and stopped increasing on a month-over-month basis, evidence of the effectiveness of rein-in measures designed to cool down the market," said Liu Aihua, spokeswoman of the bureau. 

"Looking forward, we expect the property market to continue developing healthily as investment in real estate development maintains stable growth while property sales withdraw at a moderate pace."

In terms of national inventory, about 314.84 million square meters of new residential properties were available for sale across the country as of the end of October, down from 322.56 million square meters at the end of September, according to the bureau.

Investment in residential development, which took up 68.3 percent of total real estate investment in the first 10 months of the year, climbed 9.9 percent year on year to 6.187 trillion yuan, down 0.5 percentage point from the first nine months.

"Despite decelerating growth, 2017 will still finish as a record year in terms of property sales," said Lu Wenxi, senior manager of research at Shanghai Centaline Property Consultants Co. 

"Expansion of new home sales will probably slow down further as real estate developers seem to show lacklustre interest in releasing more projects in the last two months of the year to further boost their annual performance."

Strictly enforced rein-in measures to quell housing speculation, including widely implemented stricter home purchase limits, higher down payment requirements and mortgage rates, and a lockup period for home sales in a number of cities, has been effective in slowing down property sales across the country.