China’s new home prices rose last month from a year earlier in all but two of the 70 cities monitored by Beijing, defying property curbs to keep housing affordable.
New home prices in Beijing advanced 6.8 percent last month from last year, while Shanghai climbed 1.5 percent, the statistics bureau said on its Web site yesterday, initiating a new method of calculating prices. Haikou had the biggest gain, surging 21.6 percent, and 10 cities had increases exceeding 10 percent. Housing values in Quanzhou and Nanchong fell.
China extended property curbs last month, including raising the minimum down payment for -second-home purchases, telling local governments to set price -targets on new properties and introduced taxes for residential homes in Shanghai and Chongqing. The central bank raised interest rates on Feb. 8 for the third time in four months.
“The new data clearly shows home prices are still rising and the government curbs only suppressed transaction volumes,” said Jinny Yan (嚴瑾), Shanghai-based economist at Standard Chartered PLC. “The ultimate problem is monetary policy — the government should at least raise interest rates two more times this year because if the liquidity is not tightened, it would be impossible for home prices to fall.”
New home sales in Beijing rose 0.8 percent last month from December and 0.9 percent in -Shanghai. Chongqing is the only city among the 70 that posted a decline from the previous month, dropping 0.1 percent, the statement said.
Existing home prices in Beijing rose 2.6 percent last year from a year earlier, while those in Shanghai added 1.7 percent. Prices of previously owned apartments fell in four of the 70 cities, the government data showed.
“Property prices and sales still remained strong as many buyers dashed into the market ahead of the government curbs,” Du Jinsong (杜勁松), a Hong Kong-based analyst for Credit Suisse Group AG, said before the release yesterday.
China stopped releasing national average property prices and changed the methodology of the survey starting this year, the statistics bureau announced on Wednesday, to more accurately reflect price gains.
The agency will continue to monitor 70 big and medium-sized cities and use online registration data for home transactions for 35 of them, it said. For cities that don’t have online registration systems, the bureau will continue to use figures from local authorities.
“Although property is being targeted with tightening measures, overall credit growth in the economy remains expansionary,” Erwin Sanft, head of China and Hong Kong research at BNP Paribas SA, said in an e-mail. “The memories of the 2008 downturn in exports and housing prices are still too fresh at central and local government level” to create another downturn.
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