New-home prices rise in China as market steadies
Residential property snaps three months of falls, with increases in 50 of the 70 tracked by the statistics bureau
Chinese home prices rose in more cities in October, snapping a three-month decline, a sign the market is stabilising amid government efforts to curb property speculation.
New-home prices, excluding state-subsidised housing, climbed in 50 of the 70 cities tracked by the government, compared with 44 in September, the National Bureau of Statistics said on Saturday. Prices fell in 14 cities from the previous month and were unchanged in six.
The moderate gains show China is having some success in its bid to rein in the buoyant property market without forcing a sharp deceleration. Prices had been easing after the government imposed restrictions on purchases earlier in the year. Giving support to that campaign, President Xi Jinping used his speech to the twice-a-decade Communist Party congress last month to say that homes were meant “to be inhabited, not for speculation”.
Bank of Communications analyst Xia Dan said more cities were seeing increases in property prices, but they were” indeed growing very steadily”.
“There’s very limited room for home prices to move upward or downward,” Xia said.
China’s biggest cities diverged, with new-home prices falling 0.2 per cent in Beijing from September, while rising 0.3 per cent in Shanghai, according to Saturday’s report.
Data earlier this week showed the curbs are biting, with home sales last month dropping by the most in almost three years. They fell 3.4 per cent by value from a year earlier, and 8.5 per cent by area, according to Bloomberg calculations based on the official figures.
The main near-term risk to China’s property market could come from a housing bubble in the larger cities expanding to encompass smaller ones, International Monetary Fund (IMF) researchers said in a paper dated Thursday. The nation needs to tailor policy to individual cities to effectively address the issue.
A “sharp correction” in China’s wider housing market would “weaken growth, undermine financial stability, reduce local government spending room, and spur capital outflows”, the IMF researchers wrote.