Propelled by housing prices that jumped as much as 20 percent in some major cities during December, China closed out 2013 with a record RMB 6.8 trillion ($1.1 trillion) in home sales for 2013.
According to data from the National Bureau of Statistics, the average price of a new home in all of China’s first tier cities rose by 16 percent or more in December, compared to the same period a year earlier, with costs in the southern metropolises of Shenzhen and Guangzhou going up by 20 percent.
Beijing, once the nation’s hotspot, saw December home prices climb by a slightly calmer 16 percent, while Shanghai reported an increase of 18 percent.
In total, prices were up in 65 out of 70 cities surveyed by the government, as lax enforcement of market restrictions and persistent consumer demand combined to drive December figures to annual increase of 2013.
While price increases were dramatic in the major cities, second and third-tier cities showed lower rates of increase, and the average price increase appears to be 9.2 percent. However, a report in the Wall Street Journal indicates that growth accelerated in December from a November figure of 9.1 percent.
Closing Out a Big Year
For the year as a whole, the Bureau of Statistics’ December report showed that total sales nationwide during 2013 increased 27 percent from 2012’s RMB 5.4 trillion. Growth rates also accelerated year on year, as 2012 had shown a more modest 11 percent gain over average prices in 2011.
With China reporting decelerating GDP growth of only 7.7 percent in 2013, the acceleration of housing prices is already fueling further fears of a bubble, as well as concern among analysts that the government will take further measures to restrict future price increases.
All of China’s first-tier cities increased down-payment requirements for purchases of second homes to 70 percent by November this year, as well as enacting other cooling measures. However, home price growth rates have only climbed since then.