New home prices in China’s big cities lose momentum as cooling measures bite, paving way for tougher restrictions in smaller ones
- Prices of new homes in Beijing, Shanghai, Guangzhou and Shenzhen, crept up by just 0.4 per cent in March, less than the previous month
- Smaller, second- and third-tier cities that saw faster growth in prices may soon find themselves subject to tighter property restrictions
Prices of new homes in the four first-tier cities, namely Beijing, Shanghai, Guangzhou and Shenzhen, crept up by only 0.4 per cent in March from the previous month, slightly less than the 0.5 per cent increase seen in February, according to data from the National Bureau of Statistics. Among them, the southern city of Guangzhou had the biggest increase, of 1 per cent.
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Inside Sheng Siong supermarket billionaire Lim Hock Leng’s home in Singapore
Recent cooling measures imposed by the government have included instructing the governments of six cities to build more public housing to be rented by low-income groups and young people, the “three red lines” policy aimed at curbing developers’ leverage, preventing the money from business loans from flowing to the housing market and a centralised land sale policy that limits the number of land sales each year to three in 22 cities.
The policies aim to tame speculation by controlling capital, limiting demand with regulations, and increasing the supply of land to cool the market, said Li Yujia, senior economist at Guangdong Urban and Rural Planning and Design Institute, a policy advisory branch of the provincial housing regulator.
“Once housing prices rise, regulatory policies will be introduced immediately, and fixes [in policies] will be applied in the future. Regulations have begun to spread to third-tier cities,” Li said.
For example Sanya, a third-tier city in Hainan province, tightened its monitoring of housing sales earlier this month.