Mainland home prices fall for ninth straight month
Mainland home prices fell for the ninth straight month as property curbs continued to bite, with major cities posting the biggest falls, a property survey shows.
Average home prices in 100 cities fell 1.53 per cent last month from a year ago to 8,684 yuan (HK$10,610) per square metre, said the China Index Academy, a domestic real estate research institute.
In Beijing and Shanghai, prices declined 3.2 per cent to an average 15,314 yuan per square metre during the same period.
'The continued falls in residential prices are mainly because developers are offering new projects at a discount,' said Alan Chiang Sheung-lai, head of China residential property for consultancy DTZ.
Developers' inventories were rising, forcing them to cut prices by 15 to 25 per cent to boost sales.
In Shanghai alone, more than 10 million square metres of residential space were available for sale, according to Soufun, the mainland's biggest property website.
'It is the highest since 2007, and it will take 18 months for the market to digest the housing stocks,' an agent said.
However, sales in 30 cities monitored by Centaline Group rose, as the lower prices drew buyers. Centaline said sales in those cities grew 20 per cent month on month to 16.31 million square metres last month.
'Sales volume last month climbed to a 16-month high as price cuts spread from rural to urban areas, and we have seen some obvious reduction in luxury homes in Shanghai and Guangzhou,' said Centaline Group.
DTZ's Chiang expects prices to keep falling in the second half.
Earlier last week, Kong Qingping, chairman of China Overseas Land & Investment, said the worst was yet to be over for the mainland property market and that developers faced great challenges in the second half.
According to Chiang, developers prefer to launch new projects as early as possible to compete for buyers before credit dries up. 'Banks tend to tighten their lending quotas near the year end, which will probably dampen buying demand from genuine homebuyers,' said Chiang.
In the wake of a two-year curb on home prices, nearly 40 cities have moved discreetly to ease restrictions on home purchases to revive the market, mainland media report.
However, Hunan's local government has denied that the city has eased curbs on home purchases. The denial came a day after reports of the approval of lower initial down payments and the discounting of mortgage rates for first-time homebuyers.
About 20 cities are reportedly allowing pension funds to be used to buy homes, with Chongqing's local government saying that families could apply to borrow as much as 800,000 yuan, up from 400,000 yuan, from their pension fund.
Chongqing has doubled the mortgage ceiling for individuals to this amount