Beijing, Shanghai home prices show signs of stabilising
China's two most important cities finish 2014 with encouraging signs of stabilisation
The secondary home markets in Beijing and Shanghai, the mainland's two most important cities, wrapped up with further signs of stabilisation in both prices and transactions last month, according to the SCMP-CTC index.
Prices for used homes in Beijing rose for the fourth consecutive month by 0.5 per cent from November, to 41,529 yuan (HK$52,412) per square metre. But it was 3.4 per cent lower than the same period in 2013.
In Shanghai, prices remained largely unchanged at 34,269 yuan per square metre, versus November's 34,264 yuan per square metre, marking its third consecutive month of positive changes, after falling from July to September. However, it was 1.54 per cent higher than in December 2013.
As a result, the SCMP-CTC secondary home price index remained unchanged at 158 in Beijing and 142 in Shanghai.
Meanwhile, policy relaxation and higher government efficiency in approving property deals towards the end of the year helped boost transactions, which grew 30.6 per cent month on month in December to 16,160 units in Beijing and were up 0.82 per cent to 22,063 in Shanghai. They were, respectively, 24.8 per cent and 8.3 per cent higher compared with a year earlier.
"The explosive growth in December led many people to think that this round of property market correction has bottomed out," said mainland consultancy Century 21 China Real Estate (CTC), the South China Morning Post's partner for the monthly index. "However, we think it remains to be seen whether the market will post stable development afterwards," CTC said, adding transactions could moderate during the Lunar New Year, which will fall in February.
For the whole of 2014, transactions of used homes slumped 35 per cent from 2013 in Beijing to 102,701 homes and slid 37 per cent in Shanghai to 196,296 units.
The mainland's once-sizzling property market started to crack in February last year under tight credit and oversupply, first in Hangzhou and then quickly across the whole nation. Since June, local governments relaxed policies to prop up housing demand and economic growth. And the central bank relaxed mortgage rules in September and cut interest rates in November.
"These positive policies drew buyers back into the market and cleared up the wait-and-see sentiment, boosting transactions in December," CTC said.
It added that Beijing and Shanghai's redefinition of ordinary homes, which helped buyers cut taxes and access cheaper mortgages, also encouraged residents to trade up their homes - 20 per cent of newly listed flats for sale are from such families.