Chinese property market sees effects of cooling measures just weeks after record price gains
National Bureau of Statistics says price growth fell in 15 top-tier cities, but analysts warn of speculative demand and housing affordability
Chinese housing prices softened in October after a new wave of government cooling measures, but analysts say concerns about an unsustainable property market continue.
A Bank of America Merrill Lynch report said on Monday that China’s property restrictions, including buying limits and increased down payment ratios introduced in late September and early October, have seen “initial success... in curbing speculative demand”.
As a result, there is less risk of further real estate tightening policies in the first quarter of 2017 and this may “help rationalise land prices,” Merrill Lynch analysts Karl Choi and Wenhan Chen said.
Signs of the tempered market were seen in recent National Bureau of Statistics (NBS) data highlighting slowing price growth for new community housing in the first half of October in 15 first and second-tier cities.
The numbers, from an unprecedented mid-month data release, show the price growth index declining on average by 2.5 percentage points. Property prices fell in the first half of October in Shenzhen and Chengdu by 0.3 per cent and 0.1 per cent respectively, though still rose by over 4 per cent in cities such as Zhengzhou and Wuxi.
“The data shows the rapid price gains ... have been curbed effectively,” said Liu Jianwei, a government economist at NBS.