Pace of home price falls ease in China as market shows signs of stabilising
September data shows further dip in mainland home prices but at a slower pace while sales pick up after revised rules for first-time buyers
Further signs of stabilisation in the mainland's housing market emerged yesterday as official data showed price falls slowed last month following an easing of policy.
The month-on-month drop in average new home price across 70 cities monitored by the National Bureau of Statistics slowed by 0.2 percentage point, senior statistician Liu Jianwei said, without giving specific data for the two months.
It was the fifth consecutive month of falling prices, with the downward trend spreading to 69 cities from August's 68.
Only Xiamen, in Fujian province, where prices were flat, escaped the trend.
Meanwhile, year-on-year falls in new home prices spread to 58 cities, a big jump from 19 in August.
"Although home prices kept falling in month-on-month terms, the extent of the drop eased from August," Liu said.
Noting an 8 per cent increase in new home sales for the month, he added: "We still need to watch the impact of a recovery in sales on home prices."
Data released on Tuesday showed home sales fell 10.3 per cent from a year earlier, easing from August's drop of 13.7 per cent.
Growth in residential property investment slowed to 5.2 per cent from 6.9 per cent.
Bureau spokesman Sheng Laiyun said he saw signs of positive changes in the property market after policy easing.
"The [market] correction has so far remained moderate, with third and fourth-tier cities suffering more," Sheng said on Tuesday, after announcing that the mainland's annual economic growth slowed to 7.3 per cent, the slowest pace in five years, in the third quarter.
To stem the real estate downturn and protect economic growth, Beijing switched its policy stance at the end of last month to support the struggling sector, with the People's Bank of China widening the definition of first-home buyers with the aim of giving more people access to easier and cheaper mortgage loans as part of its efforts to stimulate demand.
However, analysts said the full impact of the measures had yet to be felt, as commercial banks had remained reluctant to offer deep discounts on mortgage loans, despite the central bank encouraging discounts of up to 30 per cent. Most are granting discounts of less than 10 per cent to a limited number of homebuyers.
Still, the measures have given encouragement to Bob Liu, a clerk at a foreign car parts maker in Shanghai. He plans to clear his outstanding mortgage loan and buy a new flat as a first-time homebuyer on a mortgage with preferential terms.
Buyers like Liu now need to come up with deposits of 30 per cent of the value of the new home they are buying, only half the amount required previously.
"Shanghai has been and will always be a buoyant housing market and I can't afford to waste this opportunity to speculate on properties," Liu said. "I think the new rule will result in more than just a recovery."
Private data showed property sales recovered strongly last week, but some analysts said optimism was premature because inventories were still at record highs.
Yesterday's data showed new home prices fell 1.1 per cent in Shanghai last month, slower than August's fall of 1.3 per cent. Price falls also eased in Beijing and Shenzhen but accelerated in Guangzhou.
Three cities - Bengbu in Anhui province, Guilin in Guangxi and Luzhou in Sichuan - suffered the largest month-on-month decline, 1.9 per cent. The biggest price drop in August, 2.1 per cent, was seen in Hangzhou, the capital of Zhejiang province.