China’s February residential real estate prices show signs of cooling, as fewer cities post gains
Slowdown was most pronounced in first- and second-tier cities, the statistics bureau says
China’s residential property market showed signs of cooling in February, as fewer cities reported price gains for the month compared to January, according to the latest official figures.
The slowdown was most pronounced in first- and second-tier cities, while third-tier cities carried the bulk of the price gains, Liu Jianwei, senior statistician at the National Bureau of Statistics, said in a statement on Monday.
New home prices rose in 44 of 70 cities tracked in February, compared with 52 that reported price gains in January, the statistics bureau data showed. Prices were lower in 16 cities and unchanged in 10, according to the data, which excluded government-subsidised housing.
“It reflects the fact that the driving force of growth is weakening,” said Yan Yuejin, research director at Shanghai-based E-house China R&D Institute. “Developers are worried about the cooling off of the market, thus they are not that tough when setting the price [of new flats].”
New home prices have levelled out in China’s biggest cities in recent months as officials have stepped up efforts to put on the brakes by focusing on stable property market development this year.
Speaking at the annual parliamentary gathering in Beijing, Wang Menghui, minister of housing and urban-rural development, said the government will step up property market regulation and fight illegal conduct by property companies and intermediaries.
“The momentum of excessive gains in housing prices has been curbed and China will maintain a consistent housing policy,” Wang said.
“The country will vigorously develop the leasing market, further pushing forward the renovation of homes in rundown urban areas and continue to promote the development of public rental housing.”
Home prices in Beijing, Shanghai and Shenzhen were lower than February’s level and down from the same level a year-earlier, the statistics bureau said. On a broad average basis, new home prices trended higher by 5.2 per cent in February on year, and were 0.2 per cent higher from January, according to calculations by Reuters.
Prices in Shenzhen fell 0.6 per cent from a year ago while prices in Guangzhou were down 0.4 per cent. Prices in Shanghai and Beijing were both down 0.2 per cent from a year earlier.
“Markets have been cooling down in cities like Shenzhen since the policy tightening measures implemented in 2016. We see that it is unlikely to drop further,” said Yan of E-house. “The supply of houses is not that large, while we still see the demand pretty strong.”
“Property markets have changed in the second- and third-tier cities, with improvements in infrastructure boosting demand for purchasing flats. We see much larger room for growth in those cities,” said Yan.