News Analysis: China's home prices may drop further because of macro control

English.news.cn   2011-10-24 14:39:07 FeedbackPrintRSS

File photo taken on Sept. 8, 2011 shows a traffic sign in front of residential buildings in Qingdao, east China's Shandong Province. (Xinhua/Huang Jiexian)

BEIJING, Oct. 24 (Xinhuanet) -- "The rapid rise in property prices has been markedly contained, as the prices in some cities have begun to drop," the National Bureau of Statistics (NBS) spokesman Sheng Laiyun said in a press conference on October 18.

In order to keep housing prices down, the government adopted a series of tightening measures earlier this year, such as instructing local governments to set new home price control targets, raising minimum down payments for second-home purchases, limiting purchases of new homes and introducing property taxes in the cities of Shanghai and Chongqing.

There are clearer signs of cooling in China's property sector, as a result of the central government's measures to deflate the property bubble.

More cities see slower property price increases

More cities reported a slowdown in year-on-year increases in property prices in September as a result of government's tightening efforts to cool the market, the National Bureau of Statistics (NBS) said.

In September, 59 cities out of the statistical pool of 70 major cities saw new home prices increase more slowly from a year earlier, compared with 40 cities in August, the NBS said in a report on its website.

Property prices in first-tier cities, including Beijing, Shanghai, Shenzhen and Guangzhou all stayed flat month-on-month for the third straight month, according to the report.

Chongqing, one of the two cities to impose property taxes this year - the other being Shanghai - posted the steepest decline as prices dropped 0.4 percent from August. Changsha, Kunming, Yinchuan and Luoyang had the largest gain, 0.3 percent, according to the NBS.

Property prices are gradually heading downwards amid cumulative government control efforts.

As one market-cooling measure, the government has restricted residents in 43 major cities from buying second or third homes, resulting in a decline in property transaction volume in many of these cities.

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Editor: An
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