Chinese property market slowing, figures show
Measures aimed at cooling China’s residential real estate market seem to be working as property prices increased at their slowest pace for 11 months in July after the government expanded efforts to curb the risk of an asset bubble.
According to SouFun Holdings prices rose 0.2% in July from June, the slowest since August last year. Residential prices increased in 66 out of 100 cities tracked by the nation’s biggest real say website owner, with average home values nation-wide climbing to 8,874 yuan ($1,378) a square meter.
China’s cabinet stated last month it will expand measures to rein in residential prices to smaller cities after limiting home buys in metropolitan areas including Beijing and Shanghai. The government is intensifying real estate restrictions nation-wide after developers posted gains in first half sales and housing transactions climbed 31% in June, even as down payments on some mortgages were increased this year.
‘China’s property market is cooling down gradually, but it’s still not obvious. This is a matter of time. With high inflation and investment, it’s unlikely home prices will drop soon,’ stated Peter Bai Hongwei, a Beijing based property analyst at China International Capital, the country’s biggest investment bank.
Home prices in July rose 6.8% from a year ago. The central Chinese city of Yichang saw the biggest monthly price gain at 1.9% gain from June, while the eastern city of Suqian posted the largest decline of 2% among the 100 cities surveyed, SouFun said. Home prices in Shanghai rose 0.4% and Beijing saw them rise by 0.1% month on month.
New home prices in Beijing fell to the lowest last month since April 2010, when the government introduced the first round of measures to crack down on the market, China Securities Journal reported, citing the local property transaction bureau, which uses a different statistics system to SouFun.
China’s consumer price index hit a three year high in June while investment in real estate rose 33% to 2.6 trillion yuan in the first six months from a year earlier, according to the national statistics bureau.
Nationwide buy restrictions may damp local economies, according to Liu Li-Gang, a Hong Kong based economist at Australia & New Zealand Banking Group Ltd. ‘The one size fits all rule may not have as good an effect as expected because local governments still highly rely on land sales for revenue,’ Liu said.
Authorities in Shanghai, China’s financial centre, are to step up inspections on the pricing of new homes to ensure that they aren’t set at unreasonably high prices, in response to the central government’s order.
Some experts think the bubble will burst. ‘The property market in China is headed for a huge bust,’ stated Puru Saxena, chief executive officer of Puru Saxena Wealth Management in Hong Kong.
‘I suspect that over the next 18 months to two years, we’ll see a significant decline in Chinese real estate prices,’ he…
More source:
Chinese property market slowing, figures show | Asia | NewsChina property and real estate news
China announces slowing property market in 2011 - The China Post
China Data, Part 2: Slowing Growth « Patrick Chovanec
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Submited at Tuesday, August 2nd, 2011 at 5:00 pm on Finance by sofia
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