Home prices rise in China’s major cities for 17th straight month
Property values continued to push upwards in September, with 81 of the 100 biggest metropolises seeing growth, survey finds
Home prices in the Chinese mainland’s biggest cities rose for the 17th consecutive month in September, a private survey showed, underlining the need for policymakers to adopt tougher rules to cool the property market.
The average price of new homes climbed 2.83 per cent last month, to 12,617 yuan (HK$14,666) per square metre, up from a 2.17 per cent rise seen in August, said China Index Academy, a research unit with real estate portal SouFun. Prices rose in 81 of the 100 biggest cities, compared to in 68 a month earlier.
The survey also showed home prices gained 16.6 per cent in September against a year ago, up from August’s 13.75 per cent rise.
Local authorities have been trying different strategies to stem the rises, such as increasing down payment requirements and limiting land prices.
Shenzhen continues to be the most expensive city for property, with new home prices rising to 55,001 yuan per square metre in September.
“The threshold for home purchases in most cities is still low, more tightening is essential,” said Zhang Hongwei, a research director at the Shanghai-based Tospur Real Estate Consulting, noting the down payment requirement in most second-tier and lower cities was still 20 per cent.
On Monday, the Communist Party’s official paper People’s Daily ran a commentary saying property speculation had ruined the nation’s fighting spirit as more businessmen were leaving industries to try for easier money.
“We cannot lose our belief in struggle and fighting spirit as a result of soaring housing prices. Without these, we are essentially homeless,” the commentary said. The article was met with an outcry on social media, with users lashing out at local governments as the cause of the increases and accusing them of seeking to pop the property bubble.
On Friday, the Beijing municipal government announced that first-time buyers would have to put down 35 per cent – up from 30 per cent – while buyers of a second home must make a down payment of half, or 70 per cent if the unit exceeded 144 square metres.
Guo Yi, marketing director of Beijing-based real estate consultancy Yahao, said the new measures showed city authorities were determined to crack down on speculation through restricting leveraging.
“Transactions in both primary and second-hand markets will decline,” Guo said. “But the impact will be more apparent in the second-hand market.”
Tianjin has now banned non-local residents from buying a second home in the downtown area.
The northern port city joins the capital as the latest cities to roll out fresh restrictions on buying, after nearly 10 cities introduced similar policies in the past two months.
Some of the biggest increases were seen in more mid and smaller cities. Zhengzhou, the provincial capital of Henan province in northern China, saw prices jump 6.9 per cent in a month. Wuxi and Changzhou, the two third-tier cities in Jiangsu province, recorded an average rise of more than 6 per cent, according to the China Index Academy.
But Shenzhen continues to hold the crown for the city with the priciest new homes, with new developments charging on average 55,001 yuan per square metre in September.
Compared to a year ago, prices in the Guangdong province tech capital have surged 41.9 per cent. Shanghai rated second, with homes costing 26.8 per cent more than 12 months ago.
Shanghai and Shenzhen were very likely to follow Beijing’s move in raising down payment levels, Tospur’s Zhang said.
In Guangzhou, the Guangdong capital, housing authorities urged residents not to “blindly follow the trend” but rather buy a home “rationally based on needs,” the Guangzhou Daily reported. The mainland is on a week-long holiday to mark National Day, a peak season for property sales.