China’s overheated property market is showing tentative signs of cooling, with home prices in some of the hottest cities falling this month as authorities stepped up curbs to avert a potentially ruinous housing bubble.
New home prices in Beijing fell 3.7 percent in the first weeks of this month from last month and dropped 2.5 percent in Shanghai, the Chinese National Bureau of Statistics said yesterday, adding that the market “apparently cooled” in response to targeted measures rolled out in some cities.
Still, average new home prices in 70 cities tracked surged the most in more than seven years last month, climbing 1.8 percent from August, according to Bloomberg calculations based on the data.
Local governments in at least 21 cities have introduced property curbs, such as requiring larger down payments and limiting purchases of multiple dwellings, in a bid to arrest runaway prices. Even with some main markets cooling though, policymakers have a long way to go before they can claim victory in averting a bubble without killing one of the economy’s main pillars of growth.
“The curbs will show their effect in the initial two to three months, but in the longer term idle capital will still likely flow to property in the largest hubs as safe-haven assets,” said Xia Dan (夏丹), a Shanghai-based analyst at Bank of Communications Co (交通銀行).
The impact of the curbs will gradually abate as “liquidity is so abundant in a credit binge,” she said.
The latest data suggest moves to clamp down on the property frenzy might have had the unintended effect of stoking an already red-hot market by prompting a rush of buying before further restrictions were imposed.
Prices in Beijing jumped a record 4.9 percent last month. The local government on Sept. 30 increased down payments for first-time buyers to 35 percent, the highest among the nation’s biggest cities. In Shanghai, prices rose 3.2 percent last month.
Across the country, new home prices, excluding government-subsidized housing, gained last month in 63 of the 70 cities tracked, down from 64 in August. Prices dropped in six cities, compared with four a month earlier, and were unchanged in one.
“These curbs only aim to rein in the buying panic and to stem the bubble, instead of being an all-round shackling on the property market,” Wang Tao (王濤), chief China economist at UBS Group AG in Hong Kong, said before the data were released.
“The possibility of a home price plunge is low,” Wang said, adding that the curbs introduced so far are likely to have only a mild impact.
“The most powerful property control is credit tightening, which we have not seen,” she said. “The purchase restrictions currently imposed can still be bypassed.”
China has kept its benchmark lending rate unchanged since October last year after cutting rates six times in 11 months, sending the benchmark mortgage lending rate to a historical low of 4.9 percent. Medium and long-term bank loans to households, mostly residential mortgage loans, surged a record 571.3 billion yuan (US$85 billion) last month, according to data from the People’s Bank of China.
The pace of home sales is also rising sharply. The value of new homes sold rose 61 percent last month from a year earlier, almost double the previous month’s gain, according to Bloomberg calculations based on data released on Wednesday.
An Oct. 1 report by SouFun Holdings Ltd (搜房), the owner of China’s biggest property Web site, showed prices last month gained in 81 of 100 cities tracked, up from 68 in August. Average new home prices climbed 2.8 percent, accelerating from a 2.2 percent gain the previous month, the private data provider said.
The combination of higher prices and tougher curbs is sending more Chinese buyers to consider purchasing property in Hong Kong, where prices are becoming “relatively more affordable,” according to Bank of America Merrill Lynch.
Stephen Garrett, a 27-year-old graduate student, always thought he would study in China, but first the country’s restrictive COVID-19 policies made it nearly impossible and now he has other concerns. The cost is one deterrent, but Garrett is more worried about restrictions on academic freedom and the personal risk of being stranded in China. He is not alone. Only about 700 American students are studying at Chinese universities, down from a peak of nearly 25,000 a decade ago, while there are nearly 300,000 Chinese students at US schools. Some young Americans are discouraged from investing their time in China by what they see
Taiwan Transport and Storage Corp (TTS, 台灣通運倉儲) yesterday unveiled its first electric tractor unit — manufactured by Volvo Trucks — in a ceremony in Taipei, and said the unit would soon be used to transport cement produced by Taiwan Cement Corp (TCC, 台灣水泥). Both TTS and TCC belong to TCC International Holdings Ltd (台泥國際集團). With the electric tractor unit, the Taipei-based cement firm would become the first in Taiwan to use electric vehicles to transport construction materials. TTS chairman Koo Kung-yi (辜公怡), Volvo Trucks vice president of sales and marketing Johan Selven, TCC president Roman Cheng (程耀輝) and Taikoo Motors Group
MAJOR DROP: CEO Tim Cook, who is visiting Hanoi, pledged the firm was committed to Vietnam after its smartphone shipments declined 9.6% annually in the first quarter Apple Inc yesterday said it would increase spending on suppliers in Vietnam, a key production hub, as CEO Tim Cook arrived in the country for a two-day visit. The iPhone maker announced the news in a statement on its Web site, but gave no details of how much it would spend or where the money would go. Cook is expected to meet programmers, content creators and students during his visit, online newspaper VnExpress reported. The visit comes as US President Joe Biden’s administration seeks to ramp up Vietnam’s role in the global tech supply chain to reduce the US’ dependence on China. Images on
New apartments in Taiwan’s major cities are getting smaller, while old apartments are increasingly occupied by older people, many of whom live alone, government data showed. The phenomenon has to do with sharpening unaffordable property prices and an aging population, property brokers said. Apartments with one bedroom that are two years old or older have gained a noticeable presence in the nation’s six special municipalities as well as Hsinchu county and city in the past five years, Evertrust Rehouse Co (永慶房產集團) found, citing data from the government’s real-price transaction platform. In Taipei, apartments with one bedroom accounted for 19 percent of deals last