House prices in China fell to a 14-month low as the government pledged to maintain property curbs, according to SouFun Holdings Ltd (搜房網), China’s biggest real-estate Web site owner.
Residential values dropped 0.3 percent last month from March, the eighth month-on-month decrease, said SouFun, which began compiling the figures in July 2010.
Average prices slid to 8,711 yuan (US$1,382) a square meter and housing values fell in 71 of 100 cities tracked, the company said in an e-mailed statement yesterday.
Chinese Premier Wen Jiabao (溫家寶) said in March that the nation would “resolutely” maintain curbs on the property market, even as the government is helping first-time buyers by lowering their borrowing costs.
“Developers are cutting prices to accelerate sales,” said Johnson Hu, a Hong Kong-based property analyst for CIMB-GK Securities Research. “Home prices will fall further because developers are facing big pressure on increasing inventory.”
House prices in the southern business hub of Shenzhen fell 0.8 percent from March, the biggest decline among China’s 10 biggest cities. In Shanghai, prices dropped 0.7 percent, while those in Beijing retreated 0.4 percent, SouFun said.
Sunac China Holdings Ltd, a property developer part-owned by Bain Capital LLC, said yesterday that contracted sales last month more than doubled to 2.2 billion yuan.
Lenders in Beijing started offering mortgages to first-time buyers at or below the central bank’s benchmark rate in February, said Wu Hao, a manager at loan brokerage Bacic & 5i5j Group, the second-biggest real-estate brokerage in Beijing.
In the second half of last year, they paid 5 percent to 10 percent higher than the benchmark rate, she said, adding that the discount now could be as much as 15 percent in both Beijing and Shanghai.
The easing of mortgage policies may have a limited impact on sales because buyers prefer price cuts, Hu said.
Average house prices nationwide dropped 0.7 percent last month from a year earlier, the first year-on-year decline since June, SouFun said.
A gauge tracking property stocks in Shanghai rose 1.5 percent at the close, compared with the 1.8 percent gain on the benchmark Shanghai Composite Index.
The government would probably not introduce “meaningful easing” as the risk of a hard-landing or a rapid slide into recession for the Chinese economy was mitigated, said Alan Jin, a Hong Kong-based property analyst at Mizuho Securities Asia Ltd, in a note to clients on Monday.
Mark Mobius, chairman at Templeton Asset Management Ltd, said on his blog yesterday that “China may not be landing at all.”
China’s State Council last month pledged to stick with its existing property controls. The government has toughened requirements for down payments and mortgages, and imposed restrictions on the number of homes each family is allowed to buy.