China Home Price Slowdown Continues After Policy Restrictions

Sleepy Nantong in Jiangsu saw home prices rise 2.7% last month after larger cities were hit with restricdtions

Prices for China’s newly constructed homes continued to climb in November, albeit showing a sign of slowdown amid government’s efforts to cool the property sector. New home prices across 100 major cities inched up 0.88 percent last month, down from 1.65 percent in October, according to figures released this week by the China Index Academy, a research arm of Soufun.com.

This marks the country’s 19th consecutive month of increase in new home prices on the mainland, with average prices now standing at RMB 12,938 per square metre.

On a year-on-year basis, November’s new home prices leapt 18.7 percent in November compared to the same month last year, versus an 18.21 percent increase in October.

Prices Cool Down Following Policy Moves

Beijing is rolling out a raft of tough measures to curb home buying as prices remained stubbornly high. Shanghai last month stepped up its curbs on property purchases for the third time this year, and a handful of other cities also suspended extending mortgages.

According to the China Index Academy’s statistics, a total of 75 cities in the top 100 list still saw new home prices rise in November.

Prices in Shanghai rose by 0.88 percent, averaging RMB 45,847 per square metre, while Beijing also inched up 0.84 percent to RMB 41,292 per square metre.

The biggest price jumps continued in second and third-tier cities with Nanjing, the capital of Jiangsu province, reporting 2.56 percent. Even Nantong, a third-tier city in Jiangsu which only two years ago had one of the worst performing housing markets in the nation, saw month home price growth of 2.71 percent in November.

In Shenzhen, China’s most expensive home market, price tags of new homes fell 0.2 percent in November, averaging RMB 55,040 per square metre.

Home Sales and Investment Taper Off in November

The National Bureau of Statistics also released the country’s latest data on property sales and investment on Tuesday, saying the value of homes sold during the first 11 months of 2016 rose 39.3 percent compared to the same period last year, down from a 42.6 percent rise during the period fomr January to October.

Property investment rose 6.5 percent to 9.33 trillion yuan between January and November, slightly lower than the 6.6 percent increase in the previous 10 months.

Construction of new homes rose 2.9 percent, to 74.51 billion square metres of space, in the period between January to November. That’s slower than the 3.3 percent growth recorded in the first 10 months, said the bureau.