Home prices in Beijing and some major Chinese cities softened in April due to ongoing curbs to cool China's red-hot property market, but average prices nationwide saw their largest increase in six months, helped by purchases in smaller cities. New home prices in China rose 0.7 percent on average in April from a month earlier, outpacing the 0.6 percent increase in March, Reuters calculations of National Bureau of Statistics (NBS) data showed.
While that was the biggest gain since October, analysts said the market would further lose momentum this year due to the measures taken by the government to stifle speculation, and the question was only when it would come down. "We expect tightening measures to increase in severity for the rest of the year, and though we do not see a severe correction in prices, developers should suffer from a tight liquidity environment and continued declines in transaction volume," North Square Blue Oak, a London-based boutique investment bank, said in a note commenting on the data.
"While timing will vary city-by-city, we expect to see a price inflection point in many markets with price growth slowing under demand containment measures but cushioned by lack of supply." In April more cities reported price drops or slower price gains compared with March, the NBS said in a note on Thursday accompanying its price data for 70 cities across China.
The NBS publishes home price data by individual city. It does not publish the data by city-tier. Prices in smaller cities, known as tier-3 cities, rose 0.9 percent in April from a month earlier, while growth in tier-2 cities was flat at 0.6 percent, Yan Yuejin, an analyst with E-House China R&D Institute, said after analysing the NBS data. But in China's biggest cities, the rate of increase halved to 0.3 percent, he said.
Prices for new units in Beijing in April grew at a slower pace on a monthly basis, while Shanghai prices dropped 0.1 percent. Shenzhen prices stayed unchanged in April. Since late March, authorities in the bigger cities have intensified their campaign to drive speculators out of the property market, taking steps like forbidding buyers from selling newly purchased homes too quickly. But as result some demand spilled over into smaller cities where curbs are less stiff.
In Tangshan, a lower-tier city near Beijing, prices more than doubled in April from a month earlier to 2.2 percent, the NBS data showed. The Tangshan government announced new curbs to cool the market on Thursday. "Our analysis found that actually sales in about 42 small tier-3 cities have been rising at a pace of 35 percent year-on-year since last May, and inventory levels in those cities have plummeted," said Ouyang Jie, vice president of Shanghai-listed developer Future Land Holdings.
"That's mainly because many people have been forced out of the bigger cities. Some of them have left and gone back home to settle, in turn pushing up sales there," Ouyang told Reuters on Thursday. Home prices in China's tier-1 cities may have slowed, but they are still elevated by any measure. Beijing was the most expensive city in April with a median price of 63,647 yuan ($9,231) per square metre, or $858 per square feet, followed by Shanghai, Shenzhen and coastal city Xiamen, a state think tank said on Monday.
Comments
Comments are closed.