Home prices jump in April
Mainland home prices rose a record 12.8 per cent in April from a year ago despite efforts by Beijing to contain the overheating property market.
The increase was the largest since the government survey of residential prices in 70 cities started in 2005.
According to the National Bureau of Statistics, home prices in Haikou, the capital of Hainan, registered the largest year-on-year increase at 64.3 per cent. This was followed by a 58.2 per cent jump in Sanya, a favourite destination for mainland investors.
'The price growth was underestimated,' said Fitch Ratings director Michael Wu, who believed prices shot up 30 per cent or 35 per cent from a year ago.
Wu said that Beijing's cooling measures had started to take effect with sales volume falling in most cities during the Labour Day holiday that ended on May 3. 'Figures to be released later will reflect a clearer picture of the market,' Wu said.
Michael Choi Ngan-min, chairman of property agent Land Power International Holdings, said sales volume had plunged by as much as 70 per cent since April 16 when Beijing began cracking down with measures that included higher initial down payments and tighter loan conditions for second homes.
'Falling prices will come next after demand dries up,' he said.
Soho China chairman Pan Shiyi said yesterday that the government would continue to institute cooling measures in the property market. He expects prices to drop to the levels seen early last year.
'I heard the China Banking Regulatory Commission will tighten property lending to the developers. I don't think any sites will sell for record high prices this year,' he said. 'Land prices will drop to a reasonable level. We are cash rich. It will be a good time for us to acquire development sites.'
The statistics bureau said property investment rose to 993.2 billion yuan (HK$1.13 trillion) in the first four months, up 36.2 per cent from a year earlier.