Escalating home prices in China may be making it an ever more expensive place to live.
ZHENGZHOU, China: Growth in China’s new home prices eased slightly in January from December, in initial signs the property market is cooling as the economy slows, but price gains in annual terms accelerated.
Weaker economic momentum and the government’s drive to dampen speculation have hurt buyer sentiment but price growth has stayed relatively resilient as policymakers avoid triggering financial risks with a sharp slowdown in the key sector.
Average new home prices in China’s 70 major cities rose 0.6 percent in January, the weakest pace since April 2018, according to Reuters calculations based on data from the National Bureau of Statistics (NBS) on Friday.
That was slower than December’s 0.8 percent monthly growth but marked 45 straight months of price increases, Reuters calculations showed.
Still, on an annual basis, home prices increased 10 percent in January, accelerating from a 9.7 percent pace in December.
Fifty-eight of the total 70 cities surveyed by the NBS reported higher prices in January, down from 59 in December.
China’s economy grew at its weakest pace in 28 years last year due to trade frictions and Beijing’s multi-year campaign to crack down on debt risks, weighing on consumer sentiment and the outlook for the country’s residential property market.
Some smaller cities have quietly loosened property policies to stabilise market sentiment. In December, Heze, a city in eastern China, reversed a rule designed to curb real estate flipping.
Price growth in China’s tier-1 cities - Beijing, Shanghai, Shenzhen and Guangzhou - rose 0.4 percent from a month earlier, compared with an increase of 1.3 percent in December, the statistics bureau said in a statement accompanying the data.
For tier-2 provincial capitals and smaller tier-3 cities, the official survey showed monthly price gains of 0.7 percent and 0.6 percent, respectively.
China’s biggest developer by sales, Country Garden , China Vanke and China Evergrande all posted lower contract sales in January compared with a year earlier.
New household loans, mostly mortgages, increased by 989.8 billion yuan in January, accounting for 30.6 percent of total new loans in January, central bank data showed last week. - Reuters
Win a prize this Mother's Day by subscribing to our annual plan now! T&C applies.
