Tianjin spurs hopes for industry recovery
Northern port city leads hopes for an industry rebound after a rash of stimulus measures as transaction volume picks up across the board
The mainland's northern port city of Tianjin is leading hopes for a property recovery after a significant relaxation in policies, according to the latest SCMP-Creda index.
The city announced a rash of measures, including tax cuts, which became effective at the end of last month, as part of a nationwide bid to stimulate housing demand and reduce record-high inventories.
That pushed Tianjin's new home price up by 0.71 per cent last month from September and 13.92 per cent from a year earlier to 11,510 yuan (HK$14,560) per square metre, the highest level this year. Despite this, property sales rose 11.3 per cent from a month earlier.
"Inquiries from homebuyers increased upon the policy release, and developers therefore raised asking prices," said Chen Sheng, the dean of consultancy China Real Estate Data Academy (Creda), a partner of the South China Morning Post for the monthly index for new home prices that covers 10 major cities on the mainland.
"Tianjin is one of few cities that saw a price rise [last month]."
Hangzhou, where the downturn first started back in February, lent more support to an improving market last month. Prices of new homes in the city inched up 0.16 per cent from September, accompanied by a 37 per cent surge in sales.
In the remaining eight cities, new home prices fell, but transactions picked up across the board.
"It has become an industry consensus that developers must sacrifice prices to boost sales," Creda said. "Secretive discounts are becoming outright price cuts. A rising number of projects are offering widening discounts."
The western municipality of Chongqing led losers in prices, falling 13.2 per cent month on month.
Prices also dropped 10.07 per cent in Beijing, 12.75 per cent in Chengdu and 5.8 per cent in Guangzhou.
However, transaction volume rose 20 per cent in Chongqing, 46 per cent in Beijing, 1 per cent in Chengdu and 77 per cent in Guangzhou.
Sales in the 10 cities combined surged 28 per cent from September to 12.2 million sqmetres last month.
In year-on-year terms, new home prices rose the fastest in Tianjin in October among the 10 cities on the radar.
Prices also jumped 10.19 per cent in Shanghai, 9.3 per cent in Nanjing, Jiangsu province, and 8.8 per cent in Guangzhou. But they declined in Chongqing and Shenzhen.
Chengdu remained the city with the most affordable housing, with average homes costing almost seven years of a local family's annual income, compared with slightly more than 19 years in Beijing, the least affordable city of all.