New home prices jump 19pc in Tianjin but fall in 7 other cities

PUBLISHED : Tuesday, 12 August, 2014, 1:50pm
UPDATED : Wednesday, 13 August, 2014, 9:56am

Tianjin led gainers in new home prices among the top mainland cities last month. Prices in the northern port city jumped 19.24 per cent from June.

Meanwhile, prices fell in seven of the 10 major cities tracked by the SCMP-Creda index, as a downturn continued despite the relaxation of market-cooling curbs in dozens of cities.

The increase in Tianjin was the city's second this year. New home prices there also rose in March, according to the index, a collaboration between the South China Morning Post and China Real Estate Data Academy, a mainland consultancy. The index, published every month, tracks primary home prices, transactions and affordability in 10 major cities. Critics say official data does not fully reflect housing inflation over the past decade.

The SCMP-Creda index showed new home prices fell the most, 9.18 per cent from June, in Guangzhou, followed by 5.11 per cent in Beijing.

They dropped in Shanghai, for the first time this year, by 4.36 per cent, after the city narrowly escaped a decline in June.

"July is a traditionally slack season, and the most uncertain period so far this year in terms of policy," said Chen Sheng, Creda's dean and a property industry veteran. "Many homebuyers suspended their plans."

To stimulate demand, more than 30 out of 46 mainland cities that have imposed home purchase restrictions since 2010 relaxed such controls in the past few weeks. But the curbs remain in top-tier cities, including Beijing, Shanghai, Guangzhou and Shenzhen.

The property downturn is hitting the coffers of local governments, which rely heavily on land sales premiums to fund infrastructure and services.

In year-on-year terms, average new home prices rose in six cities, by as much as 16.9 per cent in Wuhan in Hubei province, last month. But they fell 9.65 per cent in Hangzhou in Zhejiang province, 4.06 per cent in Chengdu in Sichuan province, 0.36 per cent in Shenzhen and 0.23 per cent in Beijing.

While falling home prices have improved affordability, Beijing remained the most unaffordable city, with an average new home costing more than 17 years of family income.

The price declines and relaxation of restrictions helped drive up transactions in the 10 cities to 8.96 million square metres in July from 7.67 million sq metres in June, the index shows.

Transaction volume jumped in Chongqing to 2.28 million sqmetres last month from 1.46 million sq metres in June, boosted partly by sales of government-subsidised affordable homes. However, it fell in Shanghai to 686,000 sq metres from 1.29 million sq metres.