Home prices dip in 14 cities on cooling measures
Prices of new homes fell in 14 major cities in China last month, reflecting a slowdown in the market in response to the central government's continuous measures to curb demand and price-growth in the property sector.
Analysts predict prices are likely to fall further over the next few months as inventories owned by developers increase and home price restrictions are extended to more cities.
In 17 of the 70 cities monitored by the National Bureau of Statistics, there was no month-on-month growth in home prices last month. In June, prices of new homes fell in 12 cities and 14 cities reported no price growth.
'It is very clear that property prices are beginning to fall,' said Lee Wee Liat, regional head of property at Samsung Securities. 'In a total of 31 cities prices either fell or showed zero growth, and most are already under home-purchase restrictions.'
Last month, the State Council said it would expand measures to rein in prices in smaller cities, after limiting home purchases in major cities like Beijing and Shanghai.
According to the Samsung Securities' estimates, developers' inventories are already piling up to levels not seen since 2008 in many cities. 'Developers are now rushing to off-load inventories, and price cuts are increasingly the norm,' said Lee, who expected the price correction would now be prolonged for six to 12 months.
To date, only one city has recorded a year-on-year fall in prices, but Lee said the month-on-month measure was a much better indicator of current momentum in the market.
In Beijing, new home prices rose 1.9 per cent last month from a year earlier, compared with a 2.2 per cent rise in June; while in Shanghai prices were up 2.5 per cent year on year last month, compared with 2.2 per cent year-on-year growth the previous month, the Statistics Bureau said.
Guangzhou posted year-on-year growth of 6.4 per cent and Shenzhen saw year-on-year growth of 4.7 per cent. But all four major cities reported no growth in prices on a month-on-month basis.
The number of cities that have restricted registered residents from buying more than two flats, based on guidelines from Beijing