BEIJING — China’s property sector has shown signs of cooling after authorities stepped in with a spate of measures to contain sky-high prices, an official survey showed on Nov 18, citing fresh data for the second half of October.
Of 70 large and medium-sized cities surveyed in the second half of October, seven saw new home prices declining month on month, up from two in the first half of the month, said the National Bureau of Statistics (NBS).
“The property prices have stabilized in the second half of October,” the NBS said in a statement.
Compared with September, the month-on-month price index for both new and second-hand residential property in those cities retreated in October, even though most of the cities still reported rises.
The NBS attributed the “significant changes” to policies rolled out by local governments to curb prices. In early October, dozens of Chinese cities announced measures, including purchase limits and tightened mortgage restrictions, to prevent prices rising too fast.
Wuhan, a city in central Hubei province, rolled out measures on Nov 14 requiring higher downpayments and stronger purchase restrictions, the latest in a growing list of major Chinese cities trying to tame overheated property markets.
According to the rules, first-time buyers with a Wuhan hukou (household registration certificate) must pay a minimum downpayment of 30 percent, up 5 percent from earlier requirements. Downpayments for second home purchases will rise from 50 percent to 70 percent, and who already own two houses in the city will not be allowed to purchase more.
Data on Nov 18 showed that month-on-month price growth rates dropped in all 70 cities, with first-tier cities seeing the biggest slowdowns. New residential property prices in first-tier cities rose 0.47 percent from a month earlier. The growth rate was down 2.81 percentage points from September.
“Price changes were different depending on the city, and commercial housing sales slowed down slightly, which means the market has entered a of wait-and-see period,” said Xia Dan, a senior researcher with the Bank of Communications, one of China’s top five lenders.
Xia estimated that investment in real estate may grow slightly at the end of the year due to the effect of a low base.
“Under the influence of government controls, sales may shrink sharply in the last two months of the year,” said Ding Zuyu, co-president of real estate service company E-House China, adding that it might be a good opportunity for buyers.