By BLOOMBERG
China’s home prices rose in September in more than half of the 70 major cities monitored by the government for the first time in 17 months, as home-purchase restrictions were loosened and interest rates cut.
New-home prices rose in 39 cities, compared with 35 in August, the National Bureau of Statistics said Friday. Prices dropped in 21 cities, fewer than the 25 in August, and were unchanged in 10.
The recovery in prices last month extended to a larger number of smaller cities, underpinned by five rate cuts since November and easing of property curbs as the government is dealing with the slowest economic expansion since 2009. To further boost the recovery in less prosperous regions, China cut the deposit for first-time homebuyers in those cities for the first time in five years on Sept 30, as it tries to revive property investment that’s been a drag on growth.
“More second-tier cities saw prices reversing a decline last month, as a string of policies to boost the market start to show accumulated effects,” Bai Yanjun, Beijing-based director of research at consultant SouFun Holdings Ltd, said before the data. “However, we are unlikely to see prices rise in almost all 70 cities next year. There is still a vast inventory overhang in the third- and fourth-tier cities.”
Slower growth
New-home prices in the southern business hub of Shenzhen jumped 4% from a month earlier, slower than the 5.1% advance in August. Shanghai trailed Shenzhen to gain 1.6%, the second-fastest pace in China. The pace of growth in China’s financial hub prompted the city government to halt land auctions earlier this month in an effort to rein in the market.
Prices gained 0.9% in Beijing, slowing from the previous month, while they increased 1.4% in Guangzhou, faster than in August.
Housing sales nationwide gained 16% in September from a year earlier, narrowing from monthly growth of more than 30% in the May-August period, according to Bloomberg calculations based on official data released Oct 19. The stock of unsold new homes increased 13% to 425 million square meters as of Sept 31, the statistics bureau said on Monday.
Some analysts are not convinced that the government stimulus is enough to help revive growth. Property investment slid to 2.6% in the first nine months of this year, the slowest in at least four years.
“The effects of policies are abating,” said Ning Jingbian, a Beijing-based property analyst and China International Capital Corp. “What the government is doing is trying to prevent too sharp a decline in investment and to smooth any sudden slowdown. Stimulating the property market in the hope of reviving economic growth is not a pragmatic target.”
Shenzhen gains
Year-on-year, new-home prices rose in 12 cities in September, compared with nine in August. Prices surged 38% in Shenzhen, the fastest year-on-year pace since 2011 when the statistics bureau changed the way it compiles the data.
The average price of the 70 cities rose 2% in September from August, gaining for a fifth consecutive month, according to Bloomberg calculations based on official data. Existing-home prices rose last month in 39 cities, compared with 43 in August. They dropped in 18 cities and were unchanged in 13.
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