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Home Prices Rise in 40 Out of 70 Chinese Cities in September

2015/10/24 by Michael Cole Leave a Comment

Average prices for new homes, including subsidised housing, rose in 40 out of 70 cities in China last month, as the recovery in the country’s home market spread into more communities, according to data released this week by the National Bureau of Statistics.

Chart by Visualizer
 

Compared to August, September’s figures showed ten more cities reporting rising prices, while prices continued to drop in just 20 cities.

The encouraging news for the nation’s home industry comes after China’s government has taken repeated steps in recent months to encourage more sales, including lowering down payment requirements for buyers of additional homes at the end of August.

Despite the uptick in prices and more favorable regulations, however, home sales growth showed signs of levelling off in September, and purchases of new land by developers continued falling.

Tier One Cities Still Lead Price Increases

Although they have been largely excluded from the government’s recent easing of mortgage restrictions, China’s largest cities generally led price increases this month, as they have since prices first began recovering in April of this year.

Chart by Visualizer
 

Among the five cities reporting the greatest month-on-month increases in average home prices, four were first-tier cities, with the southern Chinese coastal centre of Xiamen the only second-tier community to sneak into the top five.

The city with the fastest growing prices was Shenzhen, which saw average prices jump by 4.01 percent in September, compared to August, while Shanghai reported a 1.60 percent increase, Guangzhou a 1.48 percent rise and Xiamen saw rates go up by 1.01 percent. Beijing had the fifth largest month on month increase in average prices at 0.97 percent.

In Shenzhen, which benefits economically from its close proximity to Hong Kong, average home prices are now up by 36.49 percent compared to the same period one year ago.

Across the 70 cities surveyed, the average month on month increase in prices for all new housing, including subsidised units was 0.20 percent – the sixth straight month that the bureau had reported rising prices.

Removal of Restrictions Helping Market Recover

September’s continuing recovery in the market comes after the government has taken a number of measures this year to rekindle a real estate industry that is estimated to contribute 15 percent of the nation’s GDP.

Chart by Visualizer
 

China’s government lowered downpayment requirements for buyers of additional homes from 30 percent to 20 percent at the end of August, for purchases of homes outside of the country’s first-tier cities. The move was seen as encouraging more investors to put their savings into housing.

And more price increases could be on the way when October’s results are tallied, as the government also lowered downpayment levels for first-time home buyers at the end of September, marking the third time that downpayment restrictions had been lowered so far in 2015.

The continued tweaking of purchase restrictions comes as China’s senior leadership continues to fret over GDP growth that slipped to 6.9 percent in the third quarter – the lowest rate since 2009.

New Investment Still Weak as Sales Growth Tapers Off

Despite the rising prices and policy encouragement, however, there are signs that China’s housing recovery remains weak, and developers are not yet convinced of the wisdom of taking on new projects.

At the same time as home prices were rising last month, growth in housing sales levelled off – staying at the same 15.3 percent month-on-month growth rate as August, in what is traditionally one of the busiest months for the property industry.

More importantly for the government’s economic targets, China’s rate of investment in real estate projects slid to a six-year low of 2.6 percent in September, as a large supply of unsold housing in many cities, combined with uncertain demand scared many developers away from new ventures.

China’s local governments, which typically rely on land sales for most of their revenue, also had some discouraging news this month as spending by developers on new sites fell by more than 33 percent compared to the same period last year.

CityIndexY-o-Y DifferenceM-o-M DifferenceCity TierProvince
Anqing102.5-4.12%-0.10%SecondAnhui
Baotou103.7-5.30%-0.19%ThirdInner Mongolia
Beihai105.9-4.08%0.47%ThirdGuangxi
Beijing125.13.99%0.97%FirstBeijing
Bengbu98.2-7.97%-0.41%ThirdAnhui
Changchun107.6-4.27%-0.09%SecondJilin
Changde105.6-4.52%0.19%SecondHunan
Changsha112.7-4.81%0.18%SecondHunan
Chengdu107.9-3.14%0.09%SecondSichuan
Chongqing106.7-4.48%0.09%SecondChongqing
Dali101.6-4.51%0.10%ThirdYunnan
Dalian109.2-5.45%-0.27%SecondLiaoning
Dandong106.0-8.62%0.00%ThirdLiaoning
Fuzhou112.3-3.93%0.27%SecondFujian
Ganzhou107.5-3.50%-0.74%SecondJiangxi
Guangzhou130.43.49%1.48%FirstGuangdong
Guilin107.4-7.17%-0.37%SecondGuangxi
Guiyang110.2-2.30%0.09%SecondGuizhou
Haikou97.7-3.93%0.21%SecondHainan
Hangzhou95.20.85%0.53%SecondZhejiang
Harbin108.8-3.80%0.18%SecondHeilongjiang
Hefei110.8-1.42%0.00%SecondAnhui
Hohhot106.6-5.83%0.00%SecondInner Mongolia
Huizhou105.3-5.73%0.67%ThirdGuangdong
Jilin108.1-4.42%-0.28%SecondJilin
Jinan108.5-1.90%0.18%SecondShandong
Jinhua99.2-1.49%0.20%SecondZhejiang
Jining106.8-4.56%0.09%SecondShandong
Jinzhou105.0-8.14%-0.19%ThirdLiaoning
Jiujiang102.6-4.65%-0.48%ThirdJiangxi
Kunming107.0-4.63%-0.28%SecondYunnan
Lanzhou110.4-3.41%0.45%SecondGansu
Luoyang108.9-4.47%-0.09%SecondHenan
Luzhou104.1-5.62%0.87%ThirdSichuan
Mudanjiang108.5-3.38%0.00%ThirdHeilongjiang
Nanchang112.1-2.78%0.45%SecondJiangxi
Nanchong102.9-6.88%-0.39%SecondSichuan
Nanjing114.01.88%0.53%SecondJiangsu
Nanning107.8-2.09%0.09%SecondGuangxi
Ningbo96.80.52%0.41%SecondZhejiang
Pingdingshan108.8-3.55%0.46%SecondHenan
Qingdao100.7-6.67%-0.10%SecondShandong
Qinhuangdao106.3-6.10%-0.28%ThirdHebei
Quanzhou99.1-6.42%0.00%SecondFujian
Sanya101.1-3.16%0.00%SecondHainan
Shanghai126.97.27%1.60%FirstShanghai
Shaoguan101.5-6.97%-0.39%ThirdGuangdong
Shenyang110.1-4.92%-0.18%SecondLiaoning
Shenzhen168.736.49%4.01%FirstGuangdong
Shijiazhuang117.7-0.59%0.26%SecondHebei
Taiyuan111.4-1.50%0.36%SecondShanxi
Tangshan97.9-4.02%0.00%SecondHebei
Tianjin110.2-0.45%0.55%SecondTianjin
Urumqi116.8-4.42%0.00%SecondXinjiang
Wenzhou78.0-1.64%0.39%SecondZhejiang
Wuhan114.00.88%0.62%SecondHubei
Wuxi101.5-2.87%0.10%SecondJiangsu
Xi’an110.8-3.40%0.18%SecondShaanxi
Xiamen129.61.09%1.01%SecondFujian
Xiangfan105.9-5.61%-0.19%SecondHubei
Xining113.7-5.96%0.00%ThirdQinghai
Xuzhou108.3-2.34%0.28%SecondJiangsu
Yangzhou104.4-3.87%0.00%ThirdJiangsu
Yantai104.3-5.35%0.10%SecondShandong
Yichang107.8-4.09%0.37%ThirdHubei
Yinchuan107.5-5.04%0.09%ThirdNingxia
Yueyang109.6-3.61%-0.18%SecondHunan
Zhanjiang106.6-8.58%0.09%SecondGuangdong
Zhengzhou122.00.33%0.41%SecondHenan
Zunyi107.1-4.20%-0.19%SecondGuizhou

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Filed Under: Research & Policy Tagged With: China home prices, crebrief, National Bureau of Statistics, NBS

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