Update | China’s roaring housing markets unlikely to see much calming from new price-cooling measures, developers say

The pace of house price inflation in China’s biggest cities is unlikely to cool significantly, even as the government intensifies tightening policies, according to the country’s leading developers.

“Prices will still rise in first-tier cities,” Evergrande Real Estate Chairman Hui Kayan said. “Home buying demand is very large, and they have strong purchasing power as the economy is robust.”

The Guangdong-based Evergrande, China’s third largest developer, reported 2015 core profit, excluding one-off items, decreased 9 per cent to 11 billion yuan (HK$13.1 billion). The company currently has 72 per cent of land investments in first and second-tier cities, and it expects to raise this proportion to 75 per cent in next few years in a bid to improve its returns.

During the weekend, Shanghai, Shenzhen,Wuhan and Nanjing tightened home purchase policies by varying degrees to rein in surging property prices.

Shanghai issued the most aggressive policies in the city’s history, including increased down payments for second home purchases. Buyers of second homes, which are classified by regulators as luxury housing, must put up 70 per cent of the property’s value, while non-Shanghai resident cannot buy a flat unless they have paid income tax or social security premiums in the city for five consecutive years.

“Beijing may follow and issue enhanced tightening policies,” said Sun Hongbin, chairman of luxury property developer Sunac China.

Sun said government wanted to curb “panic buying” due to limited supply. He added that the measures will have a negative impact on transactions volume and some luxury home prices, but overall the market should remain healthier than smaller cities.