Urban home prices continue to climb in June

Home prices continued to rise in all-tier Chinese cities in June as the country remains on track to recover from the negative impact of the coronavirus outbreak, according to data released on Thursday by the National Bureau of Statistics.

In the four gateway cities, new home prices rose by 0.6 percent from a month ago, compared with May's 0.7 percent gain. Shenzhen led with an increase of 0.8 percent, while Guangzhou, Shanghai and Beijing followed with month-over-month rises of 0.6 percent, 0.5 percent and 0.4 percent, respectively, according to the bureau, which monitors housing prices in 70 major Chinese cities.

"Optimism prevailed in the country's new residential property market with only seven cities registering month-over-month price drops in June," said Lu Wenxi, senior researcher at Shanghai Centaline Property Consultants Co. "In the four gateway cities, Shenzhen outperformed its counterparts by recording the most drastic increase due to a number of factors including talent-luring initiatives."

In the pre-occupied housing market, prices in the four top-tier cities jumped 1 percent on average, also easing by 0.1 percentage point from a month ago. They jumped most in Shenzhen, with growth of 1.9 percent; and climbed 0.8 percent, 0.7 percent and 0.4 percent in Guangzhou, Beijing and Shanghai.

In 31 second-tier cities and 35 third-tier cities, new home prices rose by an average of 0.9 percent and 0.8 percent, up by 0.3 percentage points and 0.1 percentage point from May. Prices of existing homes in second- and third-tier cities both advanced 0.5 percent, compared with growth of 0.4 percent and 0.3 percent registered a month earlier.

Nationwide, new home prices in Yinchuan in northwest Ningxia Hui Autonomous Region rose by the fastest rate for the second straight month, up 1.9 percent from May, bureau data showed.

On a year-over-year basis, prices of new homes gained 3.3 percent, 5.3 percent and 4.6 percent, respectively, in first-, second- and third-tier cities, compared with increases of 2.9 percent, 5.4 percent and 4.8 percent recorded a month earlier. In the pre-occupied market, they rose 5.2 percent, 2 percent and 2 percent, compared with 4.1 percent, 2 percent and 2.1 percent, respectively, in May.

Fueling price growth was rapidly recovering sentiment among home seekers. In the first six months of 2020, more than 5.96 trillion yuan (US$851 billion) worth of new homes, excluding government-subsidized affordable housing, were sold around the country, a year-on-year retreat of 2.8 percent, according to a separate report released by the bureau on the same day. That represented a notable improvement from the 8.4 percent decline seen in the first five months and the 16.5 percent drop registered in the first four months.

By area, new homes sold during the first half fell 7.6 percent to 611.19 million square meters, also narrowing from a year-over-year drop of 11.8 percent recorded in the first five months and a plunge of 18.7 percent during the January-April period.

Real estate developers, meanwhile, also demonstrated recovering sentiment as investment in residential property development during the first six months rose 2.6 percent to 4.64 trillion yuan from same period a year earlier. It remained unchanged in the first five months and suffered a withdrawal of 2.8 percent in the first four months, bureau data showed.

On the inventory side, newly built homes available for sale as of the end of June stood at 238.56 million square meters, a year-on-year increase of 2.7 percent. That compared with 243.7 million square meters by the end of May and 248 million square meters by the end of April, according to the NBS.