Home prices in major Chinese cities posted their first monthly decline in nearly two years last month, an independent survey showed yesterday, providing new evidence that the once red-hot market is losing steam.
The average price of a new house in 100 major cities declined this month by 0.32 percent from April to 10,978 yuan (US$1,758) per square meter, according to the China Index Academy, marking the first decrease since June 2012.
Prices dropped in 62 cities and were unchanged in one, said the academy, the research unit of real-estate Web site operator SouFun Holdings Ltd (搜房網).
The biggest monthly fall was in Shantou, in the southern province of Guangdong, where prices decreased 3.64 percent from April.
“Rising market supply and sharp falls in transactions have put relatively heavy pressure on property developers’ sales, leading some to beef up promotions and adjust their pricing strategy,” the agency said in a statement.
Year on year, new home costs rose by 7.84 percent last month, 1.22 percentage points lower than April and the fifth consecutive month the increase slowed, the agency said.
In 31 of the 100 cities, prices fell on an annual basis, with those in Wenzhou — a center of private enterprise and lending in the eastern province of Zhejiang — dropping most of all, down 8.3 percent. The survey added to signs that China’s property market is cooling, with analysts pointing to factors including stringent bank loan criteria, expectations of falling prices and financial trouble among developers.
The Chinese government has sought for more than three years to contain rising property values, while also promising to add to the supply of affordable housing, as price increases stoke discontent among ordinary citizens unable to afford new homes.
Market control measures have included restrictions on purchases of second and third homes, higher minimum downpayments and taxes in some cities on multiple and non-locally owned homes.
However, local authorities make much of their income from land sales to developers and have often rushed to loosen limits on purchases when property prices have fallen.
Among China’s 10 biggest cities, Nanjing saw the biggest fall last month, with prices going down 1.36 percent month-on-month, the agency’s statement showed.
Only two — Beijing and the northern port of Tianjin — saw new home prices increase, with the average cost in the Chinese capital rising 0.69 percent from April to 33,472 yuan per square meter.
That was up 22.39 percent from a year ago, narrowing from a 23.94-percent increase the previous month, the agency said.
China’s commercial capital, Shanghai, saw the average cost of a new home fall to 32,388 yuan per square meter, down 0.43 percent from a month ago.
Year on year, the price went up by 14.59 percent, compared with a 15.34 percent gain in April, the statement showed.
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