Major cities’ house market stable

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CHINA’S property market in major cities has stabilized as authorities move to curb price rises.

Of 70 large and medium-sized cities surveyed in February, more than half of them saw month-on-month price declines or rises under 0.5 percent for new housing, according to the National Bureau of Statistics.

Among them, 12 saw a price drop, with new housing prices in two cities flat in February, said the bureau’s senior statistician Liu Jianwei.

Another 19 cities saw home price gains above 0.5 percent last month.

New home prices in first-tier cities such as Beijing and Shanghai rose 0.1 percent on average in February, while second-tier and third-tier cities saw slightly higher price gains of 0.3 percent and 0.4 percent, respectively.

“The growing trend of new housing prices in first-tier cities was restrained after restrictive purchase measures were taken,” said Yan Yuejin, a property market analyst.

“The house prices in second-tier cities need to be further controlled due to big February gains in some cities. Third-tier cities saw a faster price rise due to their loose house purchase policies.”

On a year-on-year basis, February gains of new home prices in 20 cities decelerated from January, added Liu.

“Sales of newly built homes in 15 major cities, including Beijing, Shanghai, Guangzhou and Shenzhen, slowed in February on the back of targeted local government policies,” Liu said.

Noticeably, in the pre-owned home market, the prices rose 0.4 percent month on month in February, maintaining the growing trend for 23 months.

“The rigorous strictures were mainly targeted for the new housing market, and the price change is not evident in the pre-owned home market,” said Zhang Dawei, analyst with real estate agency Centaline.

Since October, dozens of Chinese cities have announced measures, including purchase limits and mortgage restrictions, to prevent prices from rising out of control.

The latest round of restrictions came after two years of policy easing, starting with relaxation of purchase restrictions in 2014 and fueled by the pro-growth policies, including interest rate cuts.

Many third-tier and fourth-tier cities have excess supply in their real estate markets, while housing prices in some bigger cities with access to better education and medical services are moving swiftly upward.

“We will take more category-based and targeted steps to regulate the real estate market,” read a government work report delivered at the annual parliamentary session earlier this month.

Saturday’s survey came on the heels of new measures in major cities. Beijing is raising the minimum down payment for second-home buyers and those who have no home in Beijing but have housing loan records.

The latest tightening will curb some speculation, and housing prices in some areas of Beijing may fall, Zhang said.

In a similar vein, Guangzhou has also restricted house purchases through minimum down payments for second-home buyers.