Half mainland city home prices go up

Prices rose in 35 of 70 cities, indicating government will not relax curbs on market

PUBLISHED : Monday, 19 November, 2012, 12:00am
UPDATED : Monday, 19 November, 2012, 5:56am

The mainland's new home prices rose last month in more cities than the previous month, indicating the government will refrain from relaxing curbs on the property market.

Prices climbed in 35 of the 70 cities the government tracks, compared with 31 in September, according to data released by the statistics bureau today.

Prices fell in 17 cities, the data showed.

"With prices rising or unchanged in the majority of the cities, the downward trend in China's home prices has been restrained," said Liu Ligang, a Hong Kong-based economist at ANZ Bank. "Buyers are now holding a wait-and-see position for the policy direction after the new generation of leadership."

The central government is unlikely to relax property curbs introduced over two years to rein in surging prices that raised concerns about affordability, after the Communist Party unveiled the new generation of leaders last week.

The measures had had a "relatively good" effect and the government would "steadfastly" enforce property controls, Housing Minister Jiang Weixin said at a press conference in Beijing last week.

The northwestern city of Urumqi led the gains in October, with a 0.5 per cent increase in prices from September, according to the data released yesterday.

Beijing prices rose 0.2 per cent, while those in Shanghai and 17 other cities were unchanged.

The government wanted to maintain the curbs because steady sales and mild price growth were the "exact situation" it wanted to see, while further tightening would dampen a tentative recovery in the mainland economy, Alan Jin, a Hong Kong-based property analyst at Mizuho Securities, said ahead of the data's release.

"The direction of China's property policies will not have big changes; it is unlikely that the government will relax property policies in 2013," Jin said.

Existing home prices were unchanged in Beijing last month from September and increased by 0.2 per cent in Shanghai.

Real estate prices on the mainland rose 160 per cent in the 1998-2011 period after the property market was privatised, according to government data.