New home prices in China rose last month at the slowest pace in seven months and fell or leveled off in more cities as government cooling measures dampened speculation, although there were no signs of a sharper correction that could damage the economy.
Signs of a more stable and less frothy housing market, which is a key driver of economic growth, would be good news for the Chinese Communist Party as it prepares for a key meeting next month.
Average new home prices in China’s 70 major cities rose 0.2 percent last month, half the pace of the previous month, Chinese National Bureau of Statistics data released yesterday showed.
It is the first time in three years that prices in the 15 hottest markets singled out by the bureau — mostly mega-cities and provincial capitals — have all stopped rising on a monthly basis after nearly six months of intensified controls, analysts said.
“The turning point for tier-1 and tier-2 cities has emerged,” Centaline Property Agency (中原地產代理) senior analyst Zhang Dawei (張大偉) wrote in a note.
The Hong Kong-listed shares of Chinese property developers jumped after the news.
China’s top three developers by sales — Country Garden Holdings Co (碧桂園), China Vanke Co (萬科) and China Evergrande Group (恒大集團) — rose 4.28 percent, 0.4 percent and 4.3 percent respectively.
“The data made investors a little more comfortable,” Gransing Securities Co Ltd (鼎成證券) investment strategy director Conita Hung (熊麗萍) said.
“The market was worried that China might step up tightening if home prices continued to rise... Now it was showed that the policies in place are effective and there’s less worry over further tightening,” Hung said.
Over the past year, more than 45 major cities have imposed restrictive policies of varying severity to curb fast-rising prices, with some forced into several rounds of tightening measures.
The steps have started to take some heat out of the market as sales growth has slowed from peak levels seen at the start of the year, but buyer demand appeared to be more resilient than expected.
The majority of the 70 cities surveyed by the bureau still reported a monthly price increase for new homes, although the number dropped to 52 last month from 61 in July.
Southern boomtown Shenzhen saw prices fall 1.9 percent from a year earlier, the first annual fall since March 2015, while its monthly decline further deepened to 0.4 percent from July’s 0.2 percent.
Prices in Shanghai and Beijing rose 2.8 percent and 5.2 percent respectively from the same period a year earlier, but were unchanged on a monthly basis.
However, the latest data showed that speculators are continuing to move into smaller cities with fewer controls.
Guilin, a smaller tier-3 city in southern China’s Guangxi Zhuang Autonomous Region, was the top price performer last month, rising 1.1 percent.
New home prices in tier-3 cities rose a faster-than-average 0.4 percent, but slowed from the 0.6 gain percent in July, the bureau said in a note accompanying the data.
Analysts say that China’s property market might become even more polarized in the next few months as falling inventories of finished homes could drive up prices in smaller cities, especially when the market enters the “golden September, silver October” peak sales season.
Nearly a third of Chinese households believe that housing prices will keep rising in the coming quarter, despite state moves to cool down the market, a survey by China’s central bank showed on Friday.
Analysts polled by Reuters expect China’s home prices to rise faster this year than previously estimated despite the flurry of government curbs introduced this year.
Compared with a year earlier, new home prices last month rose 8.3 percent nationwide, decelerating from July’s 9.7 percent gain, according to Reuters calculations based on the bureau’s survey.
MULTIFACETED: A task force has analyzed possible scenarios and created responses to assist domestic industries in dealing with US tariffs, the economics minister said The Executive Yuan is tomorrow to announce countermeasures to US President Donald Trump’s planned reciprocal tariffs, although the details of the plan would not be made public until Monday next week, Minister of Economic Affairs J.W. Kuo (郭智輝) said yesterday. The Cabinet established an economic and trade task force in November last year to deal with US trade and tariff related issues, Kuo told reporters outside the legislature in Taipei. The task force has been analyzing and evaluating all kinds of scenarios to identify suitable responses and determine how best to assist domestic industries in managing the effects of Trump’s tariffs, he
TIGHT-LIPPED: UMC said it had no merger plans at the moment, after Nikkei Asia reported that the firm and GlobalFoundries were considering restarting merger talks United Microelectronics Corp (UMC, 聯電), the world’s No. 4 contract chipmaker, yesterday launched a new US$5 billion 12-inch chip factory in Singapore as part of its latest effort to diversify its manufacturing footprint amid growing geopolitical risks. The new factory, adjacent to UMC’s existing Singapore fab in the Pasir Res Wafer Fab Park, is scheduled to enter volume production next year, utilizing mature 22-nanometer and 28-nanometer process technologies, UMC said in a statement. The company plans to invest US$5 billion during the first phase of the new fab, which would have an installed capacity of 30,000 12-inch wafers per month, it said. The
Taiwan’s official purchasing managers’ index (PMI) last month rose 0.2 percentage points to 54.2, in a second consecutive month of expansion, thanks to front-loading demand intended to avoid potential US tariff hikes, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday. While short-term demand appeared robust, uncertainties rose due to US President Donald Trump’s unpredictable trade policy, CIER president Lien Hsien-ming (連賢明) told a news conference in Taipei. Taiwan’s economy this year would be characterized by high-level fluctuations and the volatility would be wilder than most expect, Lien said Demand for electronics, particularly semiconductors, continues to benefit from US technology giants’ effort
‘SWASTICAR’: Tesla CEO Elon Musk’s close association with Donald Trump has prompted opponents to brand him a ‘Nazi’ and resulted in a dramatic drop in sales Demonstrators descended on Tesla Inc dealerships across the US, and in Europe and Canada on Saturday to protest company chief Elon Musk, who has amassed extraordinary power as a top adviser to US President Donald Trump. Waving signs with messages such as “Musk is stealing our money” and “Reclaim our country,” the protests largely took place peacefully following fiery episodes of vandalism on Tesla vehicles, dealerships and other facilities in recent weeks that US officials have denounced as terrorism. Hundreds rallied on Saturday outside the Tesla dealership in Manhattan. Some blasted Musk, the world’s richest man, while others demanded the shuttering of his
RSS