China recorded its 20th straight month of housing price increases in January, but growth rates have begun to slow, and new measures may be stifling sales, according to recent market reports.
The China Index Academy, which is part of real estate website Soufun.com, reported last week that on average China’s home prices moved up 11.1 percent last month nationwide, compared to the same period during 2013. January’s increase showed a slight deceleration from the 11.51 percent rate rise recorded during December.
The new nationwide average price of RMB 10,901 (US$1,799) per square meter reflected a 0.63 percent uptick compared to December, and the academy’s report also showed a deceleration in the month-to-month pace compared to a 0.7 percent increase in December and a 0.68 percent increase in November.
Of the 100 cities monitored by the academy, 94 recorded increases. Beijing, which recently changed its approach to regulating the housing market, saw the biggest growth among the largest cities with a monthly gain of 2.12 percent. Price in Shanghai and Guangzhou rose 1.31 percent and 1.02 percent respectively.
Shanghai Study Shows Transaction Slowdown
In Shanghai, however, a competing real estate study showed that while prices rose, the volume of transactions dropped by more than one quarter.
A report by Shanghai Uwin Real Estate Information Services Co that was also released last week revealed that the volume of new housing purchased during January, excluding government-funded affordable housing, fell 29.6 percent compared to the same period last year.
The same study showed that the city’s January sales of 708,900 square meters of new homes also represented a 27.6 percent month on month drop from the December mark. The January decrease in floor space sold was the third consecutive drop in total home sales by volume since October of last year, according to the report.
In November of 2013, Shanghai followed the lead of Guangzhou and Shenzhen in raising down-payment levels for buyers of additional homes to 70 percent, while also instituting other measures to cool double-digit increases in home prices.