China’s largest cities continued to reap the largest share of the country’s housing rebound during November as home prices rose by an average of 17.9 percent in Beijing, Guangzhou, Shanghai and Shenzhen, compared to the same month a year ago.
While the mega-cities saw double-digit increases, the nation’s second and third-tier communities continued to limp their way through the end of 2015, according to data released on Friday by the National Bureau of Statistics. Prices in second-tier cities are still down by 1.5 percent on an annual basis, according to the Bureau’s monthly survey of 70 cities across China, and third-tier cities fell short of last year’s mark by 3.8 percent.
November’s results come after several months of attempts by China’s government to rekindle the housing market as a source of economic growth. Now the stubborn sluggishness of the country’s smaller cities appears to make it likely that the government will continue to look for new ways to stimulate the market in the new year.
Prosperity Spreads, But Not All That Much
Looking at home price growth on a month to month basis, there are signs that the housing recovery is spreading, as 33 out of the 70 cities tracked reported price increases over October’s rates, compared to just 27 last month. However, most of these cities have yet to catch up to the prices being achieved in November of 2014.
China’s real estate market first began to pull out of its policy-induced 2014 slump during the second quarter of this year. However, the recovery that’s seen when looking at average housing prices nationwide is largely a result of rapid price increases in the first tier cities, particularly Shenzhen.
Shenzhen Prices Jump By 44 Percent
Looking at figures including sales of subsidised housing, Shenzhen in Guangdong province continues to set the pace nationwide, with prices in the city bordering Hong Kong rising by an average of 2.87 percent compared to October.
For the year, Shenzhen prices are now up by 43.89 percent. However, analysts familiar with the market have told Mingtiandi that this astonishing rate of growth is at least partly a result of the majority of transactions shifting to outlying suburban areas, as supply of new homes in downtown areas has dried up. With Shenzhen’s tech-driven economy growing rapidly and with a shortage of homes downtown, more buyers are betting on the upside of homes in outlying areas, and rapidly bidding up prices in these traditionally low-end neighborhoods.
Next on the list behind Shenzhen was Shanghai, where price were up 1.63 percent month on month and have now risen 12.61 percent in the last year.
Xiamen and Fuzhou in Fujian province, along with Nanjing in Jiangsu all snuck into the top ranks on a month on month basis with price rises of 1.14 percent, 0.89 percent and 1.13 percent respectively.
Beijing prices rose sixth-fastest nationwide at 0.79 percent month on month, while Guangzhou did not rank in the top ten for price increases.
Sliding Investment Means More Stimulus To Be Expected
Despite the encouraging results for the real estate industry in the first tier cities, this does not appear to be adequate to revive the struggling property sector. The bureau’s figures show that property investment nationwide grew by just 1.3 percent over the first 11 months of 2015, down from 2.0 percent in the period through the end of October.
This continued reticence by investors, despite five rounds of rate cuts by China’s central bank in the last year, means that more policy measures could be on the way, as the country tries to keep the economy growing.
Already this month China’s central government announced that it would begin allowing more of its rural citizens to move into second and third-tier cities to help buy up unwanted housing there, according to official media reports.
However, many analysts believe that such migration is not likely to reach mass scale until the economies in these cities begin producing jobs for these former farmers. And based on the latest housing market results, the economic recovery in these smaller cities continues to be slow in developing.
| City | Index | Y-o-Y Difference | M-o-M Difference | City Tier | Province |
|---|---|---|---|---|---|
| Anqing | 102.3 | -2.29% | -0.10% | Second | Anhui |
| Baotou | 103.4 | -4.35% | -0.10% | Third | Inner Mongolia |
| Beihai | 105.3 | -2.68% | -0.09% | Third | Guangxi |
| Beijing | 126.9 | 7.45% | 0.79% | First | Beijing |
| Bengbu | 98.3 | -4.93% | -0.20% | Third | Anhui |
| Changchun | 107.2 | -2.72% | -0.19% | Second | Jilin |
| Changde | 105.7 | -3.29% | 0.19% | Second | Hunan |
| Changsha | 112.7 | -2.51% | 0.00% | Second | Hunan |
| Chengdu | 108.5 | -0.37% | 0.46% | Second | Sichuan |
| Chongqing | 106.5 | -2.20% | -0.09% | Second | Chongqing |
| Dali | 101.3 | -3.43% | 0.00% | Third | Yunnan |
| Dalian | 108.3 | -4.07% | -0.09% | Second | Liaoning |
| Dandong | 105.6 | -6.13% | 0.00% | Third | Liaoning |
| Fuzhou | 113.7 | 0.09% | 0.89% | Second | Fujian |
| Ganzhou | 106.9 | -1.57% | -0.19% | Second | Jiangxi |
| Guangzhou | 132.1 | 7.57% | 0.53% | First | Guangdong |
| Guilin | 107.3 | -4.54% | -0.09% | Second | Guangxi |
| Guiyang | 109.7 | -1.44% | -0.18% | Second | Guizhou |
| Haikou | 97.5 | -2.30% | -0.20% | Second | Hainan |
| Hangzhou | 96.3 | 3.66% | 0.63% | Second | Zhejiang |
| Harbin | 109.1 | -1.45% | -0.09% | Second | Heilongjiang |
| Hefei | 111.8 | 0.72% | 0.54% | Second | Anhui |
| Hohhot | 106 | -4.50% | 0.09% | Second | Inner Mongolia |
| Huizhou | 105.7 | -3.21% | 0.19% | Third | Guangdong |
| Jilin | 107.8 | -2.71% | -0.19% | Second | Jilin |
| Jinan | 109.1 | -0.18% | 0.18% | Second | Shandong |
| Jinhua | 99.9 | 0.30% | 0.20% | Second | Zhejiang |
| Jining | 106.2 | -3.80% | -0.28% | Second | Shandong |
| Jinzhou | 104.3 | -6.21% | -0.48% | Third | Liaoning |
| Jiujiang | 102.1 | -3.41% | -0.20% | Third | Jiangxi |
| Kunming | 106.9 | -3.35% | -0.19% | Second | Yunnan |
| Lanzhou | 110.5 | -2.30% | 0.09% | Second | Gansu |
| Luoyang | 108.6 | -3.38% | -0.18% | Second | Henan |
| Luzhou | 104 | -3.26% | -0.29% | Third | Sichuan |
| Mudanjiang | 108.2 | -2.70% | 0.00% | Third | Heilongjiang |
| Nanchang | 113 | 0.27% | 0.36% | Second | Jiangxi |
| Nanchong | 102.7 | -4.64% | -0.10% | Second | Sichuan |
| Nanjing | 116.4 | 5.15% | 1.13% | Second | Jiangsu |
| Nanning | 108.7 | 0.56% | 0.37% | Second | Guangxi |
| Ningbo | 97.6 | 2.31% | 0.51% | Second | Zhejiang |
| Pingdingshan | 108.7 | -2.42% | -0.09% | Second | Henan |
| Qingdao | 100.4 | -4.29% | -0.20% | Second | Shandong |
| Qinhuangdao | 106.5 | -3.62% | 0.19% | Third | Hebei |
| Quanzhou | 99.4 | -4.05% | 0.00% | Second | Fujian |
| Sanya | 100.8 | -2.51% | -0.30% | Second | Hainan |
| Shanghai | 131.3 | 12.61% | 1.63% | First | Shanghai |
| Shaoguan | 102 | -4.40% | 0.59% | Third | Guangdong |
| Shenyang | 109.6 | -2.92% | 0.00% | Second | Liaoning |
| Shenzhen | 175.6 | 43.82% | 2.87% | First | Guangdong |
| Shijiazhuang | 117.8 | 1.29% | 0.26% | Second | Hebei |
| Taiyuan | 111.9 | 0.45% | 0.27% | Second | Shanxi |
| Tangshan | 97.7 | -2.50% | -0.10% | Second | Hebei |
| Tianjin | 111 | 1.74% | 0.45% | Second | Tianjin |
| Urumqi | 116.9 | -3.07% | 0.26% | Second | Xinjiang |
| Wenzhou | 78.4 | 0.26% | 0.38% | Second | Zhejiang |
| Wuhan | 115.1 | 3.14% | 0.61% | Second | Hubei |
| Wuxi | 101.6 | -1.84% | 0.20% | Second | Jiangsu |
| Xi’an | 111.5 | -1.33% | 0.18% | Second | Shaanxi |
| Xiamen | 132.7 | 4.00% | 1.14% | Second | Fujian |
| Xiangfan | 105 | -5.15% | -0.19% | Second | Hubei |
| Xining | 113.4 | -4.30% | 0.09% | Third | Qinghai |
| Xuzhou | 108.3 | -1.19% | 0.00% | Second | Jiangsu |
| Yangzhou | 104.5 | -1.97% | -0.10% | Third | Jiangsu |
| Yantai | 104.4 | -3.60% | 0.29% | Second | Shandong |
| Yichang | 108.1 | -2.61% | 0.37% | Third | Hubei |
| Yinchuan | 107.4 | -4.19% | 0.19% | Third | Ningxia |
| Yueyang | 109 | -3.20% | 0.09% | Second | Hunan |
| Zhanjiang | 106.3 | -6.59% | 0.00% | Second | Guangdong |
| Zhengzhou | 122.9 | 2.08% | 0.16% | Second | Henan |
| Zunyi | 106.8 | -3.35% | -0.19% | Second | Guizhou |
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