Home prices in China rose last month in more cities despite increased restrictions on property transactions by local authorities.
New home prices, excluding subsidized housing, gained last month in 56 out of 70 cities tracked by the government, compared with 45 in January, the National Bureau of Statistics said yesterday. Prices climbed in 67 out of 70 cities from a year earlier, compared with 66 in January.
To cool the market, Beijing city on Friday raised down-payment requirements for second homes 10 percentage points to between 60 percent and 80 percent. The rule also applied to buyers who do not currently own a home but previously had a mortgage with the same down-payment threshold, making it harder for someone to sell their house to upgrade to a bigger or more expensive property.
Southern export hub Guangzhou, coastal Qingdao and Nanjing in the southeast have also tightened measures. Changsha, the capital of inland Hunan province, joined the ranks yesterday after the home price data release.
“The government intends to pause the surging home prices, and let them walk steadily up later,” said Xia Dan (夏丹), a Shanghai-based analyst at Bank of Communications Co (交通銀行), adding that if curbs on demand are lifted, prices will rise further. “The government doesn’t want the prices to run all the time and ferment bubbles.”
China’s biggest cities have seen a round of home price surges in the past year. In Beijing, new home prices rose 24 percent last month from a year earlier, while Shanghai saw a 25 percent gain. Shenzhen prices increased 14 percent in the same period.
“Beijing’s tightening will have a short-term effect to stabilize the market, but the power of policy has become increasingly weaker,” Zhang Hongwei (張宏偉), a research director at Shanghai-based Tospur Real Estate Consulting Co (同策房產咨詢), said on Friday, adding that more local tightening may follow.