Beijing posts 19pc gain in new home prices

More high-end deals fuel the rebound in the capital whereas Guangzhou and Hangzhou decline

PUBLISHED : Tuesday, 14 October, 2014, 4:40pm
UPDATED : Wednesday, 15 October, 2014, 4:35am

Beijing snapped a three-month losing streak in new home prices last month, with the average price in the capital gaining 19.37 per cent from August. Other major cities also showed signs of recovery, the SCMP-Creda index shows.

"[Housing] markets rebounded more or less [last month], either in terms of transaction price or volume, boosted by expectations [of better performance] during 'golden September, silver October' and by local governments' new policies," said Creda's dean Chen Sheng, referring to one of the peak sales seasons.

The average price rise in Beijing reflected an increase in transactions at the higher end of the market. In year-on-year terms, the primary home price in the capital was 18.13 per cent higher, the index showed.

The index, a collaboration between the South China Morning Post and consultancy China Real Estate Data Academy (Creda), covers primary home prices and transactions in 10 key mainland cities, including Shanghai, Chongqing, Tianjin, Nanjing in Jiangsu, Chengdu in Sichuan, Wuhan in Hubei, and Shenzhen and Guangzhou in Guangdong.

New home prices also switched into positive month-on-month growth in Shanghai, Nanjing, Tianjin and Chengdu. But they went back into negative territory in Guangzhou and Hangzhou. Shenzhen and Wuhan narrowed their declines.

But prices in Chongqing fell 1.82 per cent in September after dropping 1.7 per cent in August as developers deepened price cuts to stimulate sales - to two million sqmetres last month from August's 1.3 million sqmetres.

The combined transaction volume in the 10 cities picked up for a third month, amounting to 9.5 million sqmetres in September.

The eastern city of Hangzhou, where the mainland's housing market first started to crack in February, suffered the deepest year-on-year decline of 13.07 per cent in average prices for new homes. Shenzhen prices slipped 11.17 per cent and Chongqing was down 1.42 per cent.

Among cities that posted price rises, Chengdu in the southwest was the biggest gainer, at 27.28 per cent.

Beijing remained the most unaffordable city, with homes costing 21.5 years of a family's annual income, up from 19 years in March.