The property market remained largely stable across China in January with home prices edging down slightly in major cities, the National Bureau of Statistics (NBS) said on Feb 25.
New residential housing prices in first-tier cities declined last month after rising for 32 consecutive months, while the growth of second-hand home prices went down 0.5 percentage points, contracting for 16 months in a row.
The property market in smaller cities is also showing signs of slower growth, with the growth of new residential housing prices sliding 0.3 percentage points from a month earlier.
NBS statistician Liu Jianwei said that prices were generally stable as market controls continued to take effect.
New residential home prices went down on a yearly basis in 11 of the 15 major cities considered the “hottest markets.” On a monthly basis, new residential prices fell in seven of the 15 cities, while Shenzhen, Hangzhou and Fuzhou saw prices flat with December.
Xia Dan, a senior researcher at the Bank of Communications, attributed the home price performance in the first month of 2018 to seasonal factors, tightening credit conditions and a tough stance against speculation.
Home prices were likely to continue to stabilize and show signs of cooling, while some major second- and third-tier cities may see slight price growth, Xia predicted.
Although family spending surged during Spring Festival, home sales generally came to a halt in first- and second-tier cities, but remained active in smaller cities, according to Zhang Dawei, chief analyst with Centaline Property.
“Working in first-tier cities and buying homes in second- and third-tier ones has become an option for more and more young Chinese who work far from their hometowns,” Zhang said.
However, third- and fourth-tier cities have started to tighten regulations on the housing market.
Home sales might have already peaked in 2017, and slower growth is expected for 2018 in property prices, saleable area and sales volume, according to Zhang.
At the beginning of last year, prices soared in some major cities, but government measures ended the year on a more sober note. Beijing implemented over 30 cooling policies, according to Centaline Property.
Relatively tightened liquidity to contain leverage and financial risks also helped to rein in prices. Authorities have constantly reiterated that “houses are for living in, not speculation.”
A statement released after the Central Economic Work Conference in December said that China will maintain policy continuity while adopting new policies in 2018.
Investment in real estate development grew by 7 percent last year, 0.1 percentage points faster than a year earlier, to reach nearly 11 trillion yuan ($1.7 trillion).