China's home prices continue to stabilize

Prospective homebuyers at a realty expo in Shanghai check the fine-print of a marketing brochure for a modern housing estate. [Photo/China Daily]

China's property market in major cities continued to stabilize after authorities implemented a string of measures to contain rising prices, according to an official survey released Thursday.

Of the 70 large and medium-sized cities surveyed, 30 cities witnessed a slower price rise year on year in April, up from 24 in March, said the National Bureau of Statistics (NBS).

A total of 31 cities witnessed a month-on-month price decline or a slower price uptick in April, said the NBS.

Among the 15 first-tier and second-tier cities surveyed, nine cities saw a month-on-month price decline or flat prices in April and five saw price gains of less than 1.1 percentage points.

In Beijing, new residential house prices rose 0.2 percent month on month in April, while Shanghai prices fell 0.2 percent. House prices in Shenzhen, a southern metropolis neighboring Hong Kong, remained flat.

"Prices of newly built homes in 15 major cities, including Beijing, Shanghai, Guangzhou and Shenzhen, continued to stabilize in April on the back of targeted local government policies," said NBS statistician Liu Jianwei.

Property sales recorded strong growth in 2016 with an annual gain of 22.5 percent, thanks to two years of policy easing, starting with relaxation of purchase restrictions in 2014 and fueled by pro-growth policies, including interest-rate cuts.

Since October last year, the Chinese government has implemented a slew of measures to cool fast growth in housing prices, including restrictions on home purchases and increased minimum down payment requirements.

The property market, however, picked up its pace in February this year after price gains slowed in previous months, which has led to the biggest wave of tightening of home purchases and lending rules since mid-March.

Dozens of Chinese cities have implemented tougher cooling measures to limit price gains since mid-March, following Beijing's unprecedented harsh curbs that lifted the down payment ratio for second homes to 60 percent.

Meanwhile, China's central bank has also urged banks to strengthen mortgage risk management and crack down on market irregularities such as fake divorces to skirt high down payment requirements.

Given the tougher cooling measures, analysts predicted that home prices will continue to stabilize in coming months and there will be more intensified policies due to price rises in some third-tier cities in April.

"Government cooling measures since the fourth quarter last year have gradually taken effect," said Yan Yuejin, senior researcher with E-house China R&D Institute.

He noted that more measures are needed to cope with recent price rallies in some third-tier cities.

Zhang Dawei, a senior analyst with Centaline Property, also noticed the trend in third-tier cities.

For example, Tangshan in north China's Hebei Province, led the month-on-month price rise for new residential houses among the 70 cities because of its low price base and the spillover effect of investment in areas around Beijing, Zhang said.

He predicted that more cities will be included in the tightened regulation to achieve the country's overall goal of containing house prices and de-stocking, and the market fever may shift to third- and fourth-tier cities from large cities in the future.