China’s price of new homes rises

HEADING UPWARD::Guangzhou posted the biggest increase, jumping 17 percent year-on-year; Beijing and Shanghai had a 14 percent rise last month

Bloomberg

Mon, Aug 19, 2013 - Page 15

China’s new home prices rose in almost all cities last month, led by gains in the biggest metropolitan centers, amid expectations that the government will not further tighten property market restrictions.

Prices climbed in 69 of the 70 cities the government tracked last month from a year earlier, the National Bureau of Statistics said in a statement yesterday, matching the data in June and May. The southern business center of Guangzhou posted the biggest gain, rising 17 percent from a year earlier. Prices in Beijing and Shanghai increased 14 percent each. All three cities had their biggest gains since the government changed its methodology for the data in January 2011.

“It’s unlikely that the government will release a new round of property curbs, even if home prices continued to rise rapidly. The new leadership seems to have a different mentality on property policies,” said Jack Gong, a Hong Kong-based property analyst at Orient Finance Holdings (HK) Ltd, in a telephone interview yesterday. “The new government may be less interested in tightening measures but allow the market to play a bigger role.”

China will seek “stable and healthy” development of the property market, the government said on its Web site after a meeting led by Chinese President Xi Jinping (席近平) last month. The government may release a “long-term mechanism” for stable and healthy development in about three months, Xinhua news agency reported on Thursday, citing Zhu Zhongyi (朱中一), the deputy head of the China Real Estate Industry Association.

China in March stepped up a three-year campaign to cool home prices, with only Beijing issuing the toughest measures among 35 provincial cities.

Beijing became the only region to raise the minimum down payment on second homes from 60 percent and to enforce a 20 percent capital-gains tax on existing homes.

Existing home prices rose 15 percent in Beijing last month from a year earlier and increased 11 percent in Shanghai and Guangzhou each, according to the data.

Private data also showed rising housing values. Home prices jumped 7.9 percent from a year earlier last month, according to SouFun Holdings Ltd, the nation’s biggest real estate Web site owner.

The value of home sales fell 17 percent last month from June, the statistics bureau reported on Aug. 9.

Some smaller cities have already begun easing some of the policies designed to restrain price gains. The eastern city of Wenzhou is “fine tuning” its home purchase restriction policies by allowing second home purchases by qualified local residents, Xinhua reported on Thursday, citing a local housing bureau official. Yancheng, in Jiangsu Province, suspended limits on housing prices as the supply of homes increased, the People’s Daily reported on July 23.

Wenzhou, the only city with a decline among the 70 cities the government tracked, saw new home prices fall 2.4 percent last month from a year earlier, according to the data.

“A nationwide easing is also unlikely to happen soon, because price pressures in major cities are still quite big,” said Liu Yuan, a Shanghai-based researcher at Centaline Property Agency Ltd, China’s biggest real-estate brokerage, before yesterday’s release. Liu expected home prices in such cities to rise more than 10 percent this year from last year.

Home prices will stabilize in the second half of the year as the government focuses on the long-term development of the market rather than cracking down on it, Yu Liang (鬱亮), president of China Vanke Co (萬科), the country’s biggest developer on Chinese exchanges, said on Aug. 9.