Surveys show China’s property market in broad recovery
China’s property market saw broad-based recovery last month, with more cities reporting growth in new home prices.
In major cities such as Shanghai and Shenzhen, home prices grew at a slower pace after the recently announced cooling measures. But cities close to tier-one cities and an increasing number of tier -2 and tier-3 cities saw significant rise, according to research firm China Real Estate Index System’s (CREIS) tracking of 100 cities.
Lower-tier cities like Huizhou in southern province of Guangdong and Kunshan, a city near Shanghai, grew the fastest, reporting a month-on-month increase of 6.3 per cent and 6.06 per cent. New home prices in Suzhou rose 5.49 per cent and in Nanjing, 4.73 per cent.
Analysts said local governments will soon introduce more cooling measures for the cities where the property market is heating up. Some analysts, however, believe a full-fledged recovery is still some distance off as demand in some small inland cities remain weak.
The average price of new homes in 100 cities edged up 1.45 per cent to 11,467 yuan per square metre last month, slowing from the 1.9 per cent growth in March, according to CREIS. The 1.9 per cent growth in March was the highest monthly pace since the index was launched in June 2010.
Among the 100 cities, 71 saw growth in new homes prices, up from 60 in March. Prices fell in 25, with that in four cities remaining unchanged.
In a separate survey of 288 cities tracked by China Real Estate Information Corporation (CRIC), a subsidiary of mainland property agent E-House, new home prices advanced in 177 cities last month, compared to 152 in March.
But price growth in Shenzhen slowed to 2.84 per cent from the previous month, compared with 3.6 per cent in March and 5.4 per cent in February. But on a year-on-year basis, the city’s new home prices rose 59.88 per cent.
Prices in Beijing rose 2.03 per cent month on month while those in Guangzhou were up 1 per cent. In Shanghai, home prices grew just 0.92 per cent in April. On year-on-year terms, prices in Shanghai rose 21.19 per cent.
In March, Shanghai and Shenzhen introduced a series of tough measures to cool demand, including making it more difficult for non-locals to buy homes in these cities. Sales volume in Shanghai and Shenzhen remained subdued, according to agents, but CREIS said in its report that demand in Nanjing and Wuhan, and those situated close to tier-one cities remained strong.
“Whether or not the recovery will be sustainable will depend on the overall economy,” said David Ji, head of research and consultancy, Greater China, at Knight Frank.
David Hong Shing-kei, head of research at CRIC’s Hong Kong office, expressed doubts about a recovery in China’s property market.
“Demand for homes in fourth-tier cities remain weak and there is no sign that these cities can de-stock their inventories,” said Hong.
Prices in 101 cities saw a decline, according to CRIC, with the biggest drops seen in Anshun of Guizhou.