Prices of new flats rise on the mainland in October

Survey of 100 cities finds buyers paid slightly more on average for homes in the primary market in October, extending a run of gains

PUBLISHED : Friday, 02 November, 2012, 12:00am
UPDATED : Friday, 02 November, 2012, 5:30am

Prices of new homes climbed for the fifth consecutive month on the mainland in October, rising 0.17 per cent from September, according to a survey by an affiliate of the country's biggest property website, SouFun.

The survey by the China Index Academy, which tracks home prices in 100 mainland cities, found that the average selling price of new flats last month was 8,768 yuan per square metre.

Fifty-six of the 100 cities surveyed reported rises in the prices of new flats last month, while prices dropped in 42 cities and remained stable in two others.

Dickson Wong Hung, chief executive of Centaline (China) for northern and southwest China, said home prices did not rise significantly but remained stable because of the government's tightening measures, particularly because Beijing wanted prices to be stable ahead of the 18th party congress next week.

"The mainland home market was quieter than expected in September and October, the traditional peak season for property sales," Wong said. "We had expected home sales in these two months to be as good as those in August."

He said home sales volume fell by about 5 per cent last month from September, while the September figure was also lower than August's.

The secondary home market was hit more severely as many developers launched new flats for sale during the period.

"The first week of October was extremely quiet because of the eight-day long [Mid-Autumn Festival and National Day] holiday as many people were travelling," Wong said.

"Sales improved in the second half of the month. Hopefully this trend will continue and we should see more home sales this month."

Only developers who were willing to cut prices could manage to sell their flats, he said, adding that the mainland's flat prices should remain stable in the coming two months.

Wenzhou in Zhejiang province recorded the strongest month-on-month rise in new home prices, rising 3.74 per cent in October, the academy's data showed. Dezhou in Shandong posted the steepest decline of 3.83 per cent.

In Beijing, prices of new flats jumped 0.77 per cent, while those in Shanghai rose slightly by 0.03 per cent. Year on year, the average price of new flats in the 100 cities dropped for the seventh consecutive month by 1 per cent.

"The market is quite healthy, with modest price and sales rises," Johnson Hu, a property analyst at CIMB-GK Securities Research, told Bloomberg.

"This is what the government would like to see."