Declines in China’s new home prices were restricted to fewer than half of the cities monitored for the first time in 15 months as sales extended a rebound after authorities cut interest rates and eased property curbs.
Prices declined last month in 33 of the 70 cities from a month earlier, compared with 41 in May, according to data released by the Chinese National Bureau of Statistics yesterday. Twenty-seven recorded increases, seven more than in the previous month, as first-tier centers, including Shenzhen and Shanghai, led a rebound. Prices were unchanged in 10.
The recovery has been driven by four interest-rate cuts since November last year and increased incomes as Chinese equities surged about 150 percent in the year to the middle of last month. While about US$3 trillion of that wealth evaporated in less than a month as stocks subsequently plunged 20 percent, demand from owner-occupiers is forecast to sustain sales and prices in the longer term.
The stock market rout is unlikely to shake the fundamentals of the property market, Alan Jin (金增祥), a Hong Kong-based analyst at Mizuho Securities Co, said ahead of the data.
“Housing prices and volume are firmly on a recovery trajectory,” Jin said.
New home prices in the southern business hub of Shenzhen, which is leading the residential rebound, rose 7.1 percent from May and 15.7 percent from a year earlier. Prices gained 1.3 percent in Beijing and 1.5 percent in Guangzhou, both the most in almost two years, and 2 percent in Shanghai.
The increases overshot May’s numbers in 20 cites, the statistics authority said in a statement released with the data. Less affluent cities, including Shenyang and Guiyang, reversed declines.
The strength of the real-estate recovery is likely to depend largely on the stability of the stock market in the second half, Du Jinsong (杜勁松), a Hong Kong-based analyst at Credit Suisse Group AG, said before the data release.
China eased mortgage policies and down-payment requirements for some home buyers at the end of March. While home sales jumped 13 percent in the first half of this year, compared with a 9 percent decrease a year earlier, investment in property development slowed to 4.6 percent from 14.1 percent.
“The trend of polarization is still evident among different cities,” the statistics bureau said in the statement, adding that demand was robust in first-tier cities, while smaller centers struggled.
Existing home prices rose in 42 cities last month, compared with 37 in May, the data showed. On a year-on-year basis, new home prices still fell in 68 cities last month, compared with 69 in May.
Average new home prices in 100 cities tracked by SouFun Holdings Ltd (搜房控股), which owns China’s biggest property Web site, rose 0.56 percent last month from the previous month.
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