More Chinese cities see home prices down in March
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More Chinese cities saw month-on-month declines in housing prices in March as the government continued its efforts to cool the property market, according to a statement from the National Bureau of Statistics (NBS) on Monday.
Month-on-month prices for new homes declined in 12 of the 70 cities in the NBS' statistical pool. By contrast, only eight of these cities reported declines in February. Prices stood unchanged in another eight cities, while 29 cities posted small price increases.
In the second-hand housing market, 16 cities reported price declines in March, up from four in February. Prices for second-hand homes remained unchanged in 10 cities, according to the NBS.
However, only two cities reported drops in prices for new homes over the course of the full year, including Sanya, a hot spot for property speculation in south China's Hainan Province, where prices fell 0.6 percent year-on-year.
For second-hand homes, prices declined in five cities over the year-to-year period, and 41 cities reported price increases of less than 5 percent.
The NBS stopped releasing overall housing prices for 70 major cities in January of this year, citing the fact that overall price figures for these cities failed to reflect regional differences. The NBS is also using a new surveying method to determine price changes.
The Chinese government has repeatedly stressed its efforts to cool the runaway property market and adopted various measures to curb rising property prices, including restricting residents in 35 major cities from buying second or third homes and requiring higher down payment requirements for mortgages.
In Beijing, where the municipal government is aiming for a moderate decrease in the prices of new residential housing in 2011, new home prices remained at the same level as in February. Prices in the nation's capital increased 4.9 percent from a year ago, down from February's year-on-year increase of 6.8 percent, according to the NBS.
In Shanghai and Chongqing, where new property taxes have been in place since the start of the year, new home prices went up 0.2 percent and 0.6 percent month-on-month, respectively.
On an annual basis, new property prices increased by 1.7 percent in Shanghai and 5.6 percent in Chongqing.
The government has also introduced a raft of new monetary policies that have raised borrowing costs for developers and reined in market liquidity, with the People's Bank of China, the central bank, announcing a new increase in its reserve requirement ratio on Sunday, the fourth such increased this year.
"According to the first quarter's numbers, government restrictions on the property sector have continued to pay off," Sheng Laiyun, a spokesman from the NBS said Friday, commenting on the country's first-quarter economic performance.
Zhang Dawei, an analyst with Centaline Property in Beijing, said China's real estate market is at a critical stage, turning from trading volume decline to price decrease.
"The market is still adapting to the latest policies with shrinking trade volumes and rising prices," he said, referring to the latest wave of tightening policies released in recent months.
In Beijing, the average daily transaction of new commercial housing dropped 41.5 percent from February to March due to the absence of speculative investment, according to the city's property transaction management authorities.
But observers said the fall in prices is a "structural" one, as official figures suggest that transactions had mostly moved from areas downtown to the suburbs.
Prices of houses in the city center barely changed, while new suburban homes, which account for a significant portion of the March transaction total, were sold at relatively lower prices, said Han Shitong, a researcher with Peking University.
However, this could indicate "actual price declines" in the near future, Han said, adding that Chinese developers are suffering from a slump in cash flow.
The latest figures from the NBS show that Chinese property developers obtained 1.9268 trillion yuan (289.74 billion U.S. dollars) in financing in the first quarter of this year. While the number is up 18.6 percent year-on-year, it still shows relatively slow growth when compared to the past.
The future development of China's property market will depend on the implementation of the government's tightening policies, Zhang added.
