Pressure for new curbs on China's housing market eases

Fewer mainland cities recorded higher property prices last month, easing pressure on the government to take new steps to cool the market.

Figures from the National Bureau of Statistics, which monitors property price movements in 70 major cities, show prices rose in 36, fewer than the 50 cities in July.

The largest increase in property prices in any city also fell, to 0.6 per cent from 0.7 per cent in July.

Twenty cities recorded a fall in property prices, compared with only nine a month earlier.

Prices in the remaining 14 cities stayed flat.

"Sales volume in August was also less than that in July, as some of the new projects in first- and second-tier cities began to raise their asking prices or kept them firm," said Dickson Wong Hung, Centaline (China)'s chief executive for the northern and southwest regions.

"Property sales in Beijing during the first two weeks of September have been at least 10 per cent less than in the same period in August."

Analysts were concerned the central government would release new rules after the property market recorded strong sales and significant price growth in June and July. One of the major concerns was it might impose a property tax.

Huang Tao, a project manager for the Guangzhou offices of estate agency Centaline, said: "The property market turned stable in August and the slowdown in price growth could ease the pressure to release new measures."

A research report by Nomura Hong Kong released on Monday said the firm believed the policy environment for mainland property would largely remain accommodative.

"While the deteriorating local fiscal position provides little room for further tightening, the sales recovery since May in the physical housing market also makes easing unlikely, especially on the execution of home purchase restriction policy, in our view," it said.

Huang attributes the fall in property prices last month to most of the projects being in the suburbs and targeting end-users, who are less able than investors to afford a flat.

"The property prices for those flats would be cheaper," he said.

Huang expected property sales to increase this month. But he said prices would drop further as most new projects were aimed at end-users.

Wong said he believed sales next month and in November would rebound significantly as the outlook would be clearer after the once-in-a-decade change in the top leadership.

"But I think property prices are still in a down cycle owing to plenty of new supply in the market," he said.