China home prices rise despite local curbs

FIRST-TIER::Prices increased in 69 of the 70 cities tracked by the government, despite tightened policies such as raising the minimum down payments for second homes

Bloomberg

Sun, Jan 19, 2014 - Page 13

New home prices in China’s cities defined by the government as first tier rose more than 15 percent last month, led by Guangzhou and Shenzhen, as local property curbs failed to deter buyers.

Prices rose 20 percent in Guangzhou and Shenzhen from a year earlier, and jumped 18 percent in Shanghai and 16 percent in Beijing. They increased in 69 of the 70 cities tracked by the government, the Chinese National Bureau of Statistics said in a statement yesterday.

At least 10 Chinese cities, many of them provincial capitals, have tightened local property policies since November last year, with the major cities of Shenzhen, Shanghai and Guangzhou all raising minimum down payments for second homes to 70 percent, from 60 percent.

Chinese Premier Li Keqiang (李克強) has held off introducing more nationwide policies to cool the real-estate market since he took office in March last year.

“China’s big cities will certainly implement the tightening measures more strictly this year,” Hong Kong-based property analyst at Mizuho Securities Asia Alan Jin said. “China still cares about the fast-rising home prices, otherwise those local curbs wouldn’t have come out. They don’t seem to find better ways to tackle the problem.”

Existing home prices rose 20 percent in the capital. Beijing, last month from a year earlier and increased 14 percent in Shanghai, according to today’s data.

Private data also showed there is no sign of cooling in the Chinese property market. Home prices last month had the biggest year-on-year gain last year, rising 12 percent, according to SouFun Holdings Ltd (搜房網), the nation’s biggest real-estate Web site owner.

Beijing, the financial center of Shanghai and the southern business hubs of Guangzhou and Shenzhen are considered first-tier cities by the statistics bureau.

The four “are characterized by high levels of international business connectivity, deep corporate bases and well-developed international grade stock, and they are the country’s most liquid and transparent markets,” broker Jones Lang LaSalle Inc said.

First-tier cities, including Beijing and Shanghai, may impose further curbs if prices rise too fast, Standard & Poor’s Hong Kong-based analyst Bei Fu said on a conference call yesterday.

Almost one-fifth of respondents in a Renmin University of China survey gave a zero score to the Chinese government’s property policies, indicating “near despair” with housing prices, the official China News Service reported last month, citing survey results.

Home prices would rise about 5 percent this year from last year, while home sales volume would jump about 10 percent, S&P said.