Housing prices stabilize in major Chinese cities during December

Housing prices stabilized in major Chinese cities last month as prices of new and pre-owned homes remained unchanged or grew at a slower pace from a year ago, suggesting that the property market is on the right track with stable land and home prices, said experts.

New home prices declined in 16 cities during December, while in the secondary market 26 out of the 70 major cities tracked by the National Bureau of Statistics (NBS) recorded monthly declines in pre-owned home prices.

"Local governments have actively carried out the central government's guidances for the real estate sector. They have stuck to their respective measures to stabilize local markets as well as establish a long-term mechanism," said Kong Peng, chief statistician of the NBS.

Fifty cities reported growth in new home prices during December, six more than the 44 in November, and nine less than December 2018. At the same time, 38 out of the 70 cities saw their pre-owned residential property prices grow, six more than the previous month, and nine less than a year ago.

"Thanks to promotions by property developers in the past few months, more cities reported price growth for new homes on a monthly basis in December," said Yan Yuejin, director of Shanghai-based E-house China Research and Development Institution.

Yan said the growth in new home sales influenced pre-owned home prices and rose 0.1 percent month-on-month.

"In the used homes market, another direct reflection of the residential market, more than 20 cities reported drops in pre-owned home prices, the seventh straight month for such a trend, showing that the home market is gradually stabilizing," said Zhang Dawei, chief analyst at Centaline Property Agency Ltd.

Zhang said local governments are becoming more flexible in regulating the property market with regard to the local situations.

"As many as 620 real estate measures and policies were announced in 2019, 38 percent more than that of the previous year, creating a record," said Zhang.

New home prices in the four first-tier cities edged up by 0.2 percent on a monthly basis. Prices rose by 0.7 percent in Shenzhen, followed by Beijing with 0.4 percent. Prices remained flat in Shanghai while Guangzhou was the only first-tier city to see a mild drop of 0.3 percent from November in new home prices, according to the NBS.

In the pre-owned home market of the four cities, average price growth was 0.4 percent, compared with November. Beijing and Shenzhen grew by 0.6 percent and 1 percent, while Guangzhou remained unchanged, whereas Shanghai edged down by 0.2 percent, according to the NBS.

Compared to last year, the four first-tier cities saw 3.8 percent and 1.7 percent growth in their new and existing home prices on an annual basis.

The NBS index also indicated that the 31 tier-2 cities, mostly provincial capitals, saw 7.3 percent and 3.7 percent growth in new home prices and used home prices from a year ago, narrowing the growth rates by 0.6 percentage point and 0.2 percentage point from November. Thirty five tier-3 cities saw their new home prices increase by 6.7 percent and used home prices rise 3.9 percent from the previous year.

"Both new and pre-owned home prices in second-tier cities saw growth narrowing on an annual basis for eight months in a row, while third-tier cities reported unchanged or declining growth rates for nine consecutive months," said Kong.