China’s housing market cools in January as policy tightening measures take effect
Shenzhen new home sales slump 70 per cent in January as administrative rules curb buyer appetite
Housing transactions in China’s hottest cities cooled significantly in January after the central government rolled out a series of tough measures to curb runaway home prices, recent data showed.
Analysts say the cooling shows the nationwide policy tightening has started to take effect and property transactions and prices will face pressure in cities where prices rose dramatically in 2016.
However some of the downturn for the month may be explained by the early onset of the Lunar New Year holiday. The Year of the Rooster started on January 28th, more than a week earlier than the 2016 spring festival which got underway on February 8.
In Shenzhen, the number of new private homes sold in January fell by 70 per cent year on year to 1,652 units, while transactions for the month were down 24 per cent against December, according to the latest data released by the Urban Planning, Land and Resources Commission of Shenzhen Municipality. Average home prices in Shenzhen surged 50 per cent last year, helping transform the border city into the nation’s most expensive property market.
For Beijing, Shanghai, Shenzhen and Guangzhou, the total area sold in the primary market in January dropped 48 per cent from a year ago. Meanwhile, gross sales by area in 30 major cities in January was down by 33 per cent on year, China International Capital Corporation (CICC) data showed.
“The cooling is in line with our expectations, as many developers have told us they found their sales were largely affected by the new rules, most of which were implemented in late December,” said Eva Lee, a property analyst at UBS.
