Facebook Twitter Google Plus Vimeo Youtube Feed Feedburner

Business Home LBoard

Home prices fall in more than half of Chinese cities

June 18, 2012

BEIJING: Prices for new homes in China fell in more than half of major cities in May from April, official data showed today, as the government vows to maintain controls over the property market.

Out of 70 cities tracked by the government, 43 registered month-on-month falls in home prices in May, the same number as April, the National Bureau of Statistics said in a statement.

China has implemented several measures aimed at limiting runaway property prices for more than a year, including bans on buying second homes, hiking minimum down-payments and introducing property taxes in certain cities.

But the cities that recorded rises in home prices doubled to six, including Tianjin and Dalian in the north, suggesting prices have started to rebound despite controls, analysts said.

Prices were unchanged in 21 cities, the bureau said.

The government has been encouraging banks to lend to first-time home buyers while at the same time seeking to clamp down on speculative demand.

China cut interest rates on June 8, which analysts believe could bring new life to the market.

“The government insists that its policy controls remain in place, but they do seem to be fraying at the edges,” Capital Economics said in a research report last week.

“But neither property prices nor real estate investment are likely to experience a sharp rebound,” it said. “Prices are likely to remain subdued.”

One Chinese analyst said a slowdown in property investment had limited supply, causing prices to edge higher.

“In general, home prices will maintain a trend of stable increases in future,” Li Huiyong, a Shanghai-based economic analyst at Shenyin Wanguo Securities, told AFP.

Most Shanghai-listed property developers gained in morning trade today, with Guangzhou Donghua Enterprise jumping 3.85% to 6.48 yuan (US$1.02) and Beijing Vantone Real Estate rising 1.50% to 4.05 yuan.


Readers are required to have a valid Facebook account to comment on this story. We welcome your opinions to allow a healthy debate. We want our readers to be responsible while commenting and to consider how their views could be received by others. Please be polite and do not use swear words or crude or sexual language or defamatory words. FMT also holds the right to remove comments that violate the letter or spirit of the general commenting rules.

The views expressed in the contents are those of our users and do not necessarily reflect the views of FMT.