China home price growth slows

Real estate appears to be cooling down with data showing smaller increases in prices

PUBLISHED : Wednesday, 02 April, 2014, 5:47am
UPDATED : Wednesday, 02 April, 2014, 5:47am

Mainland home prices rose last month at a slower pace, two private surveys showed yesterday, adding to signs of a cooling down in the industry that is crucial to the world's No 2 economy.

Data from E-House China, a property services company, showed its index measuring home prices in 288 mainland cities posted an 8.14 per cent year-on-year increase and 0.08 per cent month-on-month rise, down from February's growth of 9.08 per cent and 0.35 per cent, respectively.

Baoding, a city in Hebei province standing to benefit from the latest revival of joint regional development with Beijing and Tianjin, led the gainers with a 4.8 per cent month-on-month rise.

Home prices increased in 167 cities last month, fewer than February's 175 cities, the survey showed.

"This year started with a difficult first quarter," said CRIC, a unit of E-House China.

But it struck a note of confidence that if China wanted to ensure 7.5 per cent economic growth this year, real estate investment growth must pick up in the second quarter and hit 19 to 20 per cent.

CRIC warned against heavy destocking pressure in some cities, singling out eight of them - Tianjin, Hangzhou, Ningbo, Fuzhou, Qingdao, Jinan, Changchun and Shenyang.

Beijing saw an accelerated rise in home prices in both month-on-month and year-on-year terms in March as compared with February, with the index up 0.67 per cent and 16.84 per cent respectively. But gains eased in Shanghai and Guangzhou.

Shenzhen reported a 1.04 per cent month-on-month fall while Hangzhou suffered a 0.86 per cent dip.

Another survey by China Index Academy, the mainland's top real estate data provider and website operator, showed average home prices in China's 100 cities reached 11,002 yuan per square metre in March, up 0.38 per cent month on month and 10.04 per cent year on year. That was slower than the respective increase of 0.54 per cent and 10.79 per cent in February.

"Prices of most projects have stayed flat, but some have started to cut prices to boost sales with home supply now increasing," the academy said. "Most buyers are uncertain about market trend and will keep staying on the sidelines."