Xiamen only city in mainland China to report growth in housing prices
Official figures reveal declines in 68 of 70 big mainland cities last month, against 64 in July
Xiamen is the only mainland city which recorded growth in new private housing prices among the 70 major mainland cities in August, government figures showed.
Some 68 of the 70 cities monitored by the National Bureau of Statistics recorded falls in property prices last month, compared with 64 cities in July.
The number of cities where prices fell is the highest since research started in January 2011.
Guangzhou and Mudanjiang of Heilongjiang province suffered the deepest drop at 1.4 per cent.
Xiamen's new home prices climbed 0.2 per cent in August. Wenzhou's property prices were flat.
Overall prices were still higher than the year-ago level, with the prices of 65 cities higher than in August last year. The prices of three cities fell from a year ago.
"Most mainland cities recorded a price fall last month. But the decline has narrowed. It also happened in the secondary market," said Liu Jianwei, the senior statistician at the bureau.
In the second-hand market, prices declined in 67 cities last month, compared with 65 in July. Only Hefei recorded growth in property prices, while prices in Xiamen and Guizhou province's Zunyi were flat.
Disappointing sales of new projects this month pressured the shares of mainland developers yesterday.
KWG Property Holdings dropped 4.47 per cent to close at HK$5.56, the steepest fall among mainland developers. Wuzhou International Holdings and Sunac China Holdings declined 4.11 per cent and 3.75 per cent respectively.
"September used to be the property market's peak season. But the latest figures show sales are not strong. Investors are losing confidence on some property stocks, which led to the fall," said Kenny Tang Sing-hing, an analyst at AMTD Financial Planning.
Analysts at JP Morgan said many local governments have removed or eased policy restrictions on buying homes in recent months because of the soft- ness of the housing market. In recent weeks, some real estate developers were allowed to raise funds from bond and equity markets.
The analysts expect housing policies will be further eased to slow down the adjustment process in the housing market, but the softness in real estate investment will remain a major drag on economic growth.
A possible policy option could be easing the loan-to-value restrictions for second-home buyers, which is now subject to a maximum ratio of 40 per cent.
"We believe most mainland local and regional governments can tide over a 50 per cent decline in property-related revenue over the next year or so," said Liang Zhong, a credit analyst at Standard & Poor's.
