China's housing market sees slower growth rate amid epidemic

Cao Qian
Despite signs of stability, the value of nationwide home sales plunged nearly 35 percent year on year during the first two months, NBS data show.
Cao Qian

New home prices in Chinese cities rose at a slower pace in February as the coronavirus outbreak made an obvious impact on the country's real estate market, the National Bureau of Statistics said on Monday.

In the country's four gateway cities, new home prices remained flat from a month ago, compared with January's 0.4 percent gain, according to the bureau, which monitors housing prices in 70 major Chinese cities.

Beijing was the only city to register an increase of 0.1 percent from a month earlier. Shanghai and Shenzhen both saw no change. In Guangzhou, new home price dipped 0.1 percent.

In the pre-occupied housing market, prices in the four top-tier cities added 0.2 percent on average, decelerating from January's 0.5 percent growth. Shanghai and Shenzhen recorded month-over-month gains of 0.5 percent and 0.2 percent, respectively; while in Beijing and Guangzhou, home prices fell 0.2 percent and 0.1 percent.

In 31 second-tier cities and 35 third-tier cities, new home prices both rose by an average of 0.1 percent, easing from January's 0.2 percent and 0.4 percent growth. Prices of existing homes in second-tier cities were unchanged again from a month earlier. In third-tier cities, prices of existing homes retreated by 0.1 percent, reversing from a 0.2 percent gain in January.

"Despite the rather noticeable impact from the COVID-19 outbreak, the domestic real estate market still managed to maintain its stability," said Kong Peng, a chief statistician at the bureau.

Nationwide, new home prices in Chengdu, Sichuan Province, rose 1.2 percent in February, the largest month-on-month increase, bureau data showed.

On a year-on-year basis, prices of new homes added 3.5 percent, 6.2 percent and 5.9 percent, respectively, in first, second and third-tier cities. In the pre-occupied market, they gained 2.2 percent in first-tier cities, unchanged from a month ago, and rose 3 percent and 3.3 percent, respectively, in second- and third-tier cities, decelerating from January.

For the first two months of 2020, new home sales in China posted a double-digit slide as the COVID-19 outbreak kept both real estate developers and buyers on the sidelines, according to a separate NBS report released on the same day.

Over January and February, 719.8 billion yuan (US$102.8 billion) worth of new homes, excluding government-subsidized affordable housing, were sold around the country, a year-on-year plunge of 34.7 percent.

By area, new homes sold during the two-month period plummeted 39.2 percent year on year to 74.89 million square meters, the bureau's data showed.

On the inventory side, newly built homes available for sale as of the end of February stood at 256.97 million square meters, a year on year increase of 1.9 percent. That compared with 224.73 million square meters as of the end of December 2019.

Investment in residential property development during the first two months, meanwhile, dropped 16 percent from same period a year ago to 731.8 billion yuan. That compares with an annual gain of 13.9 percent for 2019.

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