The number of major Chinese cities posting a drop in home prices doubled last month, the government said yesterday, in a sign efforts to cool the country’s surging property market are working.
The price of new homes in 34 out of 70 Chinese cities tracked by the government dropped last month from September, doubling from the 17 cities that experienced falls in September, the National Bureau of Statistics said.
China has introduced a range of measures aimed at bringing down prices in the past year, such as bans on buying second homes in some cities, hiking minimum down payments and introducing property taxes.
New home prices in another 20 cities were stable last month over the previous month, while only 16 cities saw prices rise on a monthly basis, down from 24 in September, the bureau said in a statement.
Analysts said there was more room for housing prices to fall, as the government appeared unwilling to relent in its drive to tame the market.
“If the government would like to make things look good, they will not ease the curbs in the near term,” said Regina Yang (楊悅晨), a Shanghai-based director at property consultancy Knight Frank.
Property developers have been hit hard by the measures and a lack of funds after the government hiked interest rates and restricted bank lending to rein in surging inflation and cool real estate prices.
“The target is to control fast rises in property prices without sharp falls, which may cause economic and social instability,” Yang added.
Housing prices in the capital, Beijing, commercial hub Shanghai and the southern cities of Guangzhou and Shenzhen — among the most speculative markets — all fell slightly last month from September, figures showed.
However, only two cities — coastal hubs Ningbo and Wenzhou, which has been hit by a lending crisis — recorded year-on-year falls in housing prices last month.
The latest figures added to the already gloomy outlook for the property sector and dealt a blow to China’s listed real estate companies.
China Vanke (萬科), the nation’s largest developer, ended down 3.2 percent at 7.07 yuan yesterday morning, while Poly Real Estate (保利地產) fell 3.4 percent to 9.04 yuan.
“Sentiment towards the property sector, which has long been weak due to slipping sales, declining earnings and a gloomy outlook for the next few years, was hurt further,” Haitong Securities (海通證券) analyst Zhang Qi said.
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