China home sales value slows in first 11 months, as curbs take effect
Value of homes sold rose 39.3pc, down from 42.6pc, but property investment still jumped 6.5pc to 9.33 trillion yuan between January and November
Beijing’s latest raft of tougher measures to curb home buying appear to be having the desired effect, after the latest figures showed sales grew at their slowest pace this year.
The value of homes sold rose 39.3 per cent in the first 11 months of this year, down from a 42.6 per cent increase from January to October, according to data released by the National Bureau of Statistics on Tuesday.
Alfred Lau, an analyst at Bocom International, described the government’s tightened mortgage policies as “an effective means of dampening buyer demand”.
“Developer sales in first- and second-tier cities also recorded fewer transactions,” he added.
Lau now expects the number of residential transactions to continue falling this month, as developers hold back on new project launches.
Larry Hu, an analyst at Macquarie Capital, expects property sales growth next year could turn negative due to the effects of a high base and policy tightening .
“Property investment could be more resilient, slowing to one to two per cent next year from six to seven per cent this year,” according to a research note by Hu.
More than 20 cities tightened their property policies in early October, he said, pointing out that the impact could be seen clearly in November data, including investment, housing prices, sales and commencement of construction work for new homes.
Property sales growth slowed to 8 per cent year on year last month from 26 per cent in October, according to NBS.
Property investment rose 6.5 per cent to 9.33 trillion yuan between January and November, just slower than the 6.6 per cent growth in the previous 10 months.
Construction of new homes rose 2.9 per cent, to 74.51 billion square metres of space, in the first 11 months, slower than the 3.3 per cent growth recorded in the first 10 months, said NBS
On Sunday, China Index Academy released data showing price growth in the 100 cities it monitors eased to 0.88 per cent last month from 1.56 per cent in October as curbs took effect.
Shanghai municipality last month stepped up its restrictions on property purchases for the third time this year, while a number of other cities suspended extending mortgages, amid central government discontent that home prices had failed to fall since the last tightening, in October.
Among the new round of regulations, Shanghai buyers without properties in their name, but in possession of mortgage records, will no longer be considered as “first-time homebuyers”.
The minimum down payment for “first-time homebuyers”, meanwhile, has been raised from 30 per cent to 35 per cent, according to a Shanghai government statement. The minimum down payment for buyers of second ‘ordinary’ homes was raised to 50 per cent, and 70 per cent for ‘non-ordinary’ homes.