China property

Chinese new home prices continued to cool in November

Shanghai and Beijing saw flat home price rises compared with October, while Shenzhen dropped 0.2 per cent

PUBLISHED : Monday, 18 December, 2017, 11:00am
UPDATED : Tuesday, 19 December, 2017, 2:31am

Prices for new homes in China continued to cool in November, as they fell or were unchanged in 20 out of the 70 cities monitored since the previous month, amid a prolonged government campaign to curb property speculation, the latest official figures showed on Monday.

New home prices rose in 50 of the 70 cities tracked by the National Bureau of Statistics, the same as in October, but most recorded a less than 1 per cent increase.

Prices declined in 10 cities compared with 14 in October, and were unchanged in 10 cities, compared with six. Average prices across the 70 cities rose by 0.3 per cent in November, the same as October’s price gains, according to a calculation by Reuters based on the bureau’s data.

Shanghai and Beijing reported flat home prices compared with October, and compared with a year ago, when they declined by 0.3 per cent. Prices in Shenzhen dropped by 0.2 per cent in November from October, the bureau said.

The prices have been cooling since the government imposed restrictions on purchases this

year. President Xi Jinping used his keynote speech at the twice-a-decade Communist Party Congress in October to remind buyers homes are meant “to be inhabited, not for speculation”.

Since November, regulators have also stepped up curbs against the largely unregulated micro lenders lending to the housing sector, in a broad effort to defuse financial risks from a rapid build up in debt, which would be highlighted in this week’s Central Economic Work Conference.

Liu Jianwei, an economist with the bureau, flagged the fact that among the 15 largest cities it closely monitors, 11 reported drops in prices of new homes compared with a year ago, an outcome that it welcomed.

However, new home sales still grew nationally in November, climbing the most in five months.

Sales by value, excluding affordable housing, increased by 12.4 per cent from a year ago to 1.02 trillion yuan ($151 billion), according to the South China Morning Post’s own calculations, based on data released by the bureau earlier.

The Chinese Academy of Social Science said in an annual report this month that price gains were likely to continue cooling off into next year, with sales volume falling.

Zhang Hongwei, the research director of Shanghai-based property consultancy TopSur, expected no policy easing in the following year, before the end of 2018, when the regulation changes direction in response to a prolonged property downturn.

Li Xingwen, a property analyst with ICBC International, expected the 2018 home sales volume to fall by 2 to 10 per cent from 2017, but a price slump in first-tier cities might end towards the end of 2018, as local governments ease the current price-cap measures to encourage more supply.

Ren Zhiqiang, an outspoken property tycoon, lashed out at the price controls in a conference last week. “With all the adulterated home prices, the price has lost its market signal function. Without the true price signal, everyone’s decision is based on that which is wrong,” he said.