Surge in mainland property prices slows

PUBLISHED : Saturday, 11 September, 2010, 12:00am
UPDATED : Saturday, 11 September, 2010, 12:00am

The slowdown in mainland property price growth last month is expected to ease the pressure on the authorities to cool down the market, analysts say.

According to the National Bureau of Statistics, the average residential price in 70 mainland cities was flat last month and was only 9.3 per cent higher than a year ago. In April, the price was 12.8 per cent up on the year.

'The figures are good,' said Nicole Wong, an analyst at CLSA. 'It shows the growth rates in property prices continued to slow after the central government introduced the cooling measures in April. That in turn means political pressure [for more curbs] would ease.'

She believes the government will not relax the current measures until the end of the year. 'In the last few years, property prices have rebounded significantly whenever the government relaxed the measures. I think the government won't do the same thing this year to avoid a strong rebound in prices,' she said.

Property prices in first-tier cities, except Beijing, fell last month, a bureau survey shows. Prices in Beijing were flat despite being about 11.5 per cent higher than in August last year.

Prices in Shanghai, Guangzhou and Shenzhen fell 0.1, 0.3 and 0.2 per cent from July, respectively.

Prices in Guangzhou were only 2.5 per cent higher than a year ago, clearly reflecting the impact of the cooling measures.

But property investments still recorded strong growth. Total investment in the market grew 36.7 per cent to 2.84 trillion yuan (HK$3.25 trillion) in the first eight months.

Lai Kwok-keung, the chief executive of Centaline Property Consultant, Southern China, said he did not expect new cooling measures to be imposed as price growth has slowed.