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More Chinese Cities See Home Price Rebounds in May

2015/06/21 by Michael Cole Leave a Comment

New home prices climbed in 20 out of 70 major Chinese cities last month compared to April, as the country’s home market continues to see signs of recovery after a year-long slide.

Chart by Visualizer

Among the 70 urban centres surveyed each month by China’s National Bureau of Statistics, 41 cities still saw month-to-month declines in the prices of newly built homes, excluding subsdised housing, in May. But even this number decreased from April, when 47 cities reported price drops. In April, only 18 cities had reported price increases.

Overall, average prices for new housing, including subsidised units, were up 0.06 percent during May.

The signs of price growth in China’s home market come after government leaders loosened home purchase restrictions this year and cut interest rates, in an attempt to revive the country’s real estate sector.

First Tier Cities Lead Gains

Among the cities reporting gains, China’s largest urban centres led the housing recovery. For prices of all housing, including subsidised units, Shenzhen showed the sharpest monthly increase, rising 6.52 percent compared to April. Next in line was Shanghai, where prices rose 2.24 percent, with Guangzhou following at 1.39 percent and Beijing up 1.10 percent compared to April.

Chart by Visualizer

Among the tier-two and tier-three cities which rounded out the top ten gainers, the majority came from China’s prosperous east coast. Significantly, the Zhejiang province cities of Hangzhou, Ningbo and Jinhua were all among the top ten centres for price growth last month, after leading the housing slide last year.

However, even in the top ten cities for monthly gains during May, all but Shenzhen were still reporting prices at least two percent lower than during the same month last year. The southern Chinese megacity, which borders Hong Kong, was the only urban centre in the survey reporting an annualised increase in prices, with rates there up 7.28 percent compared to May of 2014.

A Tale of Tiers

While the first tier cities showed the most gains, its clear from the data that China’s smaller urban centres, (tiny places under five million population or so), are not quite ready to bounce back.

CityIndexY-o-Y DifferenceM-o-M DifferenceCity TierProvince
Anqing102.5-6.39%0.00%SecondAnhui
Baotou104.4-7.86%-0.19%ThirdInner Mongolia
Beihai105.1-7.07%-0.19%ThirdGuangxi
Beijing119.8-2.12%1.10%FirstBeijing
Bengbu99.7-8.78%-0.20%ThirdAnhui
Changchun107.3-6.53%-0.37%SecondJilin
Changde106.1-6.85%-0.28%SecondHunan
Changsha112.5-9.05%-0.27%SecondHunan
Chengdu106.7-7.22%0.09%SecondSichuan
Chongqing106.2-7.73%-0.09%SecondChongqing
Dali101.9-5.12%-0.20%ThirdYunnan
Dalian108.8-8.49%0.00%SecondLiaoning
Dandong106.9-9.56%-0.28%ThirdLiaoning
Fuzhou111.2-8.02%0.00%SecondFujian
Ganzhou107.5-6.52%-0.37%SecondJiangxi
Guangzhou123.9-4.77%1.39%FirstGuangdong
Guilin107.9-9.86%-0.19%SecondGuangxi
Guiyang109.4-4.37%-0.18%SecondGuizhou
Haikou97.1-6.54%-0.21%SecondHainan
Hangzhou92.2-9.34%0.55%SecondZhejiang
Harbin108.5-5.41%0.00%SecondHeilongjiang
Hefei110.3-3.50%0.18%SecondAnhui
Hohhot106.6-8.10%-0.28%SecondInner Mongolia
Huizhou104.8-8.95%-0.38%ThirdGuangdong
Jilin108.4-6.23%-0.28%SecondJilin
Jinan108.1-5.67%0.28%SecondShandong
Jinhua98.4-5.84%0.31%SecondZhejiang
Jining107.9-5.02%-0.37%SecondShandong
Jinzhou106.4-9.45%-0.37%ThirdLiaoning
Jiujiang103.4-6.34%0.29%ThirdJiangxi
Kunming108.1-5.92%-0.18%SecondYunnan
Lanzhou110.5-5.23%-0.27%SecondGansu
Luoyang109.1-7.07%-0.09%SecondHenan
Luzhou103.8-9.50%-0.38%ThirdSichuan
Mudanjiang109.1-3.88%-0.09%ThirdHeilongjiang
Nanchang111.2-6.32%0.18%SecondJiangxi
Nanchong104.2-8.27%-0.48%SecondSichuan
Nanjing111.1-2.88%0.27%SecondJiangsu
Nanning106.9-5.73%0.00%SecondGuangxi
Ningbo94.7-5.68%0.53%SecondZhejiang
Pingdingshan108.3-6.40%-0.28%SecondHenan
Qingdao100.5-9.46%-0.20%SecondShandong
Qinhuangdao107-7.68%-0.28%ThirdHeibei
Quanzhou99.4-9.22%-0.10%SecondFujian
Sanya100.7-6.41%-0.20%SecondHainan
Shanghai118.9-2.54%2.24%FirstShanghai
Shaoguan102.7-9.67%-0.39%ThirdGuangdong
Shenyang109.2-9.98%-0.18%SecondLiaoning
Shenzhen135.67.28%6.52%FirstGuangdong
Shijiazhuang116.2-4.36%0.09%SecondHebei
Taiyuan110.5-5.07%0.18%SecondShanxi
Tangshan98-5.50%-0.61%SecondHeibei
Tianjin108.8-3.89%0.28%SecondHebei
Urumqi117.3-6.53%-0.17%SecondXinjiang
Wenzhou77.1-3.14%0.26%SecondZhejiang
Wuhan111.7-4.77%0.09%SecondHubei
Wuxi101.6-5.40%0.10%SecondJiangsu
Xi’an110.1-6.06%-0.09%SecondShaanxi
Xiamen126.8-0.47%0.08%SecondFujian
Xiangfan107.3-7.82%-0.09%SecondHubei
Xining115.3-5.72%-0.43%ThirdQinghai
Xuzhou108-5.18%-0.09%SecondJiangsu
Yangzhou104.5-7.36%-0.19%ThirdJiangsu
Yantai104.8-7.58%-0.19%SecondShandong
Yichang108-6.49%-0.18%ThirdHubei
Yinchuan108.4-6.31%-0.37%ThirdNingxia
Yueyang110.5-3.91%-0.18%SecondHunan
Zhanjiang108-9.24%-0.46%SecondGuangdong
Zhengzhou119.7-1.72%0.08%SecondHenan
Zunyi107.5-5.87%-0.09%SecondGuizhou

Among the 16 third-tier cities included in the survey, all but Jiujiang in Jiangxi province were still reporting price drops in May. However, even the fastest sliding markets were still falling at less than single digits in terms of percentage, with the city of Tangshan in Hebei province sliding the most at 0.61 percent compared to April.

Unlike their bigger brethren, however, many of China’s second and third-tier cities are burdened with sizable inventories of unsold housing, the legacy of the country’s latest housing surge in 2012-2013.

Slow Investment Could Bring More Help for Housing

Despite the reappearance of growth in China’s biggest cities, slowing growth in real estate investment could trigger more government moves to rekindle the sector this year.

Chart by Visualizer

The summer months of July and August traditionally spell slower housing sales and less growth in pricing in China, but that could change should the government decide to cut interest rates again or take other steps to revive a real estate sector that is estimated to account for at least 15 percent of GDP.

While the value of China’s home sales increased in May for the first time in several months, the rate of investment continued a year-long slide to just 5.1 percent for the year to date. This slow-down in housing investment has already contributed to a decision by China’s central bank to cut benchmark interest rates three times since November, and many analysts are betting on more such moves before the summer is over.

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

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