Chinese property prices cool after six months of accelerating gains
●New-home prices are up 1 per cent from previous month
●Analyst says ‘a market correction has started’
China’s home-price gains slowed in September, breaking a half-year streak of accelerating inflation in the housing market.
New-home prices gained 1 per cent from the previous month, according to Bloomberg calculations based on data released by the National Bureau of Statistics on Saturday. That compared with a 1.5 per cent increase in August.
The Chinese government is likely to keep a tight grip on the property market at least until next year, despite a shift in policy focus from deleveraging to supporting slower growth under rising trade tensions, according to economists including Capital Economics. Officials are seeking to avert a resurgence in buying frenzies as they step up efforts to increase credit supply.
“A market correction has started, as sales have undoubtedly cooled,” Yang Kewei, Shanghai-based research director at China Real Estate Information Corp, said before the release. “A bottleneck in residential purchasing power has been seen in some cities, especially those in second tiers.”
Signs of a home-market slowdown emerged last month under the Chinese government’s protracted housing curbs. Builders offered hefty discounts to speed sales, while a growing number of land parcels went unsold.
The biggest month-on-month price increase in September was a 6.2 per cent gain in Xian, the data for 70 cities show. In Beijing, where more tightening was announced last month, values remained unchanged. In Shanghai, prices declined by 0.1 per cent.
China’s developers, already weighed down by a financing squeeze, face another potential blow in their biggest funding channel after a report last month that a local authority is considering ending the practice of selling flats before they are finished.
Builders are the gloomiest in eight years as buyer demand wanes. Over the so-called golden week holiday, typically a buoyant period for home sales, only about half of properties offered ended up sold, a marked slowdown from two months earlier, CRIC analysts led by Yang wrote in a report on Tuesday.