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Housing prices rise in more Chinese cities

English.news.cn   2013-03-18 10:01:42            

 

Photo taken on March 18, 2013 shows commercial apartment buildings in Yinchuan, capital of northwest China's Ningxia Hui Autonomous Region.  (Xinhua/Peng Zhaozhi)

BEIJING, March 18 (Xinhua) -- New home prices rose more steeply in more Chinese cities in February, putting the government in an increasingly complex situation of regulating the bubble-ridden market, official data showed Monday.

Of a statistical pool of 70 major Chinese cities monitored by the National Bureau of Statistics (NBS), 66 cities saw home prices increase within 3.1 percent in February from a month earlier, while three saw prices remain unchanged and only one reported price falls.

The figures indicate warming in the housing market since January, when 53 cities reported a growth margin of no more than 2.2 percent.

New home prices in Beijing and Guangzhou saw the largest increase of 3.1 percent on a month-on-month basis, followed by Shanghai and Shenzhen with price hikes of 2.3 percent and 2.2 percent, respectively.

East China's Wenzhou reported home prices declining by 0.4 percent from January, the data showed.

On a year-on-year basis, 62 cities registered rising prices, with Guangzhou showing the biggest rise, of 8.2 percent, up drastically from January's highest growth rate of 4.7 percent.

Beijing recorded the second-largest year-on-year growth of 7.7 percent.

Wenzhou, meanwhile, saw its home prices plunge 10.7 percent from the same period of last year.

Zhang Dawei, director of Centaline Property's research center, attributed the growth to panicky home buyers driven into hurried purchases by worries that prices may rise further following the recent gaining streak.

In addition, new house supplies in the country's first-tier cities kept falling, which also contributed to the rise, he said.

His words were echoed by Su Xuejing, an analyst with the research division of China Securities Co., who believes that pressure continues to be exerted on home prices as the country's housing stock has shrank for two consecutive months.

Major cities including Beijing and Shanghai have recorded the number of houses for sales dipping to a near-eight-month low, Su said.

Since 2010, the Chinese government has adopted a range of measures, including restricting third-home purchases and introducing property tax trials, to reel in the runaway real estate market, which has been the country's key economic driver in recent years.

However, home prices started to rebound unexpectedly in the second half of 2012, shored up by the country's pro-growth policies, including two consecutive interest rate cuts and the lowering of banks' reserve requirement ratio.

New home prices of a statistical pool of 100 Chinese cities surveyed by China Index Academy averaged 9,893 yuan (1,576.8 U.S. dollars) per square meter, representing growth for a ninth straight month since June.

In the first two months of 2013, investment in the country's property sector rose 22.8 percent year on year to 667 billion yuan, with capital inflow to residential housing up 23.4 percent, much quicker than that of 2012, data from the NBS showed.

Construction began on 174.31 million square meters of housing in the same period, up 15.3 percent from a year earlier.

Sales of commercial property surged 49.5 percent to 104.71 million square meters year on year, up 47.7 percentage points from the pace for 2012, the data showed.

In response, the central government issued on March 1 an array of measures comprised of higher transaction duties, increased down payments and mortgage interest rates, and strict purchase qualifications to further tighten its grip on the real estate sector.

Of all the measures, a 20-percent capital gains tax levied on used home sales has attracted the most attention, dubbed as unprecedented hard action on speculative activities in the housing market.

Prior to the new rules, capital gains tax on used home transactions was 1 percent to 2 percent of the sale price.

Prompted by the move, second-home buyers rushed to close their ongoing deals before the measures took effect, contributing to a surge in used-home sales and sparking concerns on whether the new curbs would cool the overheated market.

Qi Ji, vice minister of housing and urban-rural development, suggested on the sidelines of the just-ended two sessions that local governments will stipulate much more specified property curbs guided by central policy by the end of March.

Zhang Hongwei, an analyst with property research center Tospur, expects the temporary rebound in the housing market to be stifled after the control policies of local authorities take shape.

The current booming home sales cannot reflect the market trend, he said.

Zhang Xu, a researcher of property brokerage firm HomeLink, considered the pivot point to be improving the construction of government-subsidized affordable housing and a related mechanism to meet the enormous needs for new and used homes.

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Editor: Sha Sha
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