Urban home market remains on path toward recovery

Residential prices in all-tier Chinese cities climbed at either a slower or same pace in July compared with a month ago, as the country's property market continued to recover from the COVID-19 pandemic, according to data released on Friday by the National Bureau of Statistics.

In the four gateway cities, new home prices increased 0.5 percent from a month ago, easing from June's average gain of 0.6 percent. Guangzhou ascended to the top with a 0.8 percent rise, while Shenzhen, Shanghai and Beijing followed with month-over-month increases of 0.6 percent, 0.4 percent and 0.3 percent, respectively, according to the bureau, which tracks housing prices in 70 major Chinese cities.

"In general, despite being a traditionally low season for property sales, July continued to register some market resilience with only six cities posting month-over-month declines, one less than June," said Lu Wenxi, senior researcher at Shanghai Centaline Property Consultants Co. "However, several cities, mainly first- and second-tier ones where overheating signs have emerged, introduced some reining-in measures in July, leaving immediate impact on both transaction volumes and prices."

In the pre-occupied housing market, prices in the four top-tier cities jumped 0.7 percent on average, down 0.3 percentage points from a month ago. They jumped most in Guangzhou, with growth of 1.6 percent; climbed 1.2 percent and 0.5 percent in Shenzhen and Shanghai, and remained flat in Beijing.

In 31 second-tier and 35 third-tier cities, new home prices rose by an average of 0.5 percent and 0.8 percent, easing 0.4 percentage points and remaining unchanged from June, respectively. Prices of existing homes in second- and third-tier cities both advanced 0.5 percent, both flat compared with a month earlier.

Nationwide, new home prices in Yinchuan in the northwest Ningxia Hui Autonomous Region rose by the fastest rate for the third straight month, up 2 percent from June, bureau data showed.

On a year-over-year basis, prices of new and existing homes rose 3.6 percent and 5.7 percent in the four first-tier cities, both accelerating from June. New home prices gained 5.1 percent in second-tier cities and 4.5 percent in third-tier ones. Costs of pre-occupied homes added 2 percent in second-tier cities and rose 1.8 percent in third-tier ones.

A separate report released on the same day by the bureau also showed that property sales were catching up steadily as the impact of the coronavirus outbreak further wanes.

In the first seven months of 2020, more than 7.26 trillion yuan (US$1.04 trillion) worth of new homes, excluding government-subsidized affordable housing, were sold around the country, a year-on-year dip of 0.4 percent. That represented a major improvement from the 2.8 percent decline seen in the first six months and the 8.4 percent retreat registered in the first five months.

By area, new homes sold during the first seven months fell 5 percent to 738.78 million square meters, also narrowing from a year-over-year drop of 7.6 percent in the first half and the 11.8 percent decrease recorded in the first five months.

On the investment side, real estate developers around the country earmarked more than 5.56 trillion yuan during the January-July period for property development, a year-on-year increase of 4.1 percent. That compared with a rise of 2.6 percent recorded in the first six months.