Advertisement

Warning of correction as property prices stall

Reading Time:2 minutes
Why you can trust SCMP
0

Home prices in about two-thirds of mainland cities remained unchanged or fell last month for a second straight month, prompting warnings from analysts about a possible price correction.

Figures released by the National Bureau of Statistics yesterday showed residential flat prices rose in only 24 of the 70 cities surveyed.

They dropped in 17 and remained unchanged in 29, including first-tier cities such as Beijing, Shanghai, Guangzhou and Shenzhen.

'We think September probably marked the beginning of a correction, but the central government wouldn't want to ease tightening just yet,' said Yao Wei, an economist at Societe Generale.

The mainland's property market has been reeling under a series of government policies, such as home purchase restrictions in about 40 cities and increased downpayment requirements and mortgage rates on some varieties of homes, aimed at curbing prices.

Yao said she believed the government was targeting a price correction of 5 to 10 per cent and that it would be a few more months before there is any general policy easing.

'Considering the difficulties of managing the pace of deflating a bubble, we expect some risk of ... 10 to 20 per cent downside in China's property prices,' she said.

Advertisement
Select Voice
Choose your listening speed
Get through articles 2-3x faster
1.1x
220 WPM
Slow
Normal
Fast
1.1x