SHANGHAI—Average housing prices in China fell in May at a gentler pace for a second consecutive month, signaling that the decline in property prices is stabilizing in response to government measures.
The latest price data came on the back of a rebound in transactions in major cities after the government moved to support certain property purchases based on genuine rather than speculative demand, which encouraged developers to make fewer price cuts in anticipation that a bottom in prices may be in sight.
Analysts said that the government is focused on aiding only demand by owner-occupiers and is unlikely to loosen its grip on policy curbs that target speculators.
According to a government survey, prices of newly built homes in 43 of the 70 large and medium-sized Chinese cities fell in May on a sequential basis, unchanged from 43 cities in April and lower than 46 in March, the National Bureau of Statistics said in a statement Monday.
On a year-on-year basis, prices of newly built homes fell in 55 of the 70 cities in May, higher than 46 cities in April and 38 cities in March.
Prices of newly built homes in major cities such as Shanghai, Shenzhen and Guangzhou were marginally lower compared with April, while prices in Beijing were flat, the statement said.
Based on Dow Jones Newswires' calculations, prices in the 70 cities surveyed decreased by a marginal 0.12% on average in May from a month earlier, compared with a 0.25% decrease in April and a 0.29% decrease in March.
On a year-on-year basis, prices fell 1.23% on average in May, accelerating from a 0.94% decrease in April. China is giving higher priority to stimulating growth amid concerns that its domestic economy is cooling too rapidly.
The People's Bank of China cut interest rates earlier this month—its first such move since December 2008—while the central bank had eased the cash reserve requirements for banks twice this year.
The government has also encouraged banks to offer lower mortgage rates for first-time home buyers and called on developers to increase construction of smaller and cheaper apartments.
It is also giving some leeway to cash-hungry local governments to loosen property restrictions. Some banks have been offering discounts of as much as 15% on mortgage rates for first-time home buyers since March, attracting customers that are more sensitive to high prices.
"There has been a slight rebound in transactions and prices, but this means that the government is unlikely to further relax the property tightening measures. I don't think prices would rise or fall too much in the second half of the year," said Matthew Fang, an analyst at Guosen Securities.
China's housing ministry said Monday it would continue to strictly implement the mortgage policies currently in place, the state-run Xinhua News Agency reported.
The comments, which follow recent statements from the central bank that it hasn't lowered the floor for first-home mortgage rates, were made in response to some media reports that Beijing would loosen property credit policies, Xinhua said.
Banks are allowed to offer a discount of as much as 30% to benchmark interest rates to first-time home buyers, and have been encouraged by the government to support such buyers.
Banks are required to charge buyers of second homes mortgage rates that are 1.1 times benchmark interest rates, and aren't allowed to extend loans to buyers of third or subsequent homes.
wsj.com
The latest price data came on the back of a rebound in transactions in major cities after the government moved to support certain property purchases based on genuine rather than speculative demand, which encouraged developers to make fewer price cuts in anticipation that a bottom in prices may be in sight.
Analysts said that the government is focused on aiding only demand by owner-occupiers and is unlikely to loosen its grip on policy curbs that target speculators.
According to a government survey, prices of newly built homes in 43 of the 70 large and medium-sized Chinese cities fell in May on a sequential basis, unchanged from 43 cities in April and lower than 46 in March, the National Bureau of Statistics said in a statement Monday.
On a year-on-year basis, prices of newly built homes fell in 55 of the 70 cities in May, higher than 46 cities in April and 38 cities in March.
Prices of newly built homes in major cities such as Shanghai, Shenzhen and Guangzhou were marginally lower compared with April, while prices in Beijing were flat, the statement said.
Based on Dow Jones Newswires' calculations, prices in the 70 cities surveyed decreased by a marginal 0.12% on average in May from a month earlier, compared with a 0.25% decrease in April and a 0.29% decrease in March.
On a year-on-year basis, prices fell 1.23% on average in May, accelerating from a 0.94% decrease in April. China is giving higher priority to stimulating growth amid concerns that its domestic economy is cooling too rapidly.
The People's Bank of China cut interest rates earlier this month—its first such move since December 2008—while the central bank had eased the cash reserve requirements for banks twice this year.
The government has also encouraged banks to offer lower mortgage rates for first-time home buyers and called on developers to increase construction of smaller and cheaper apartments.
It is also giving some leeway to cash-hungry local governments to loosen property restrictions. Some banks have been offering discounts of as much as 15% on mortgage rates for first-time home buyers since March, attracting customers that are more sensitive to high prices.
"There has been a slight rebound in transactions and prices, but this means that the government is unlikely to further relax the property tightening measures. I don't think prices would rise or fall too much in the second half of the year," said Matthew Fang, an analyst at Guosen Securities.
China's housing ministry said Monday it would continue to strictly implement the mortgage policies currently in place, the state-run Xinhua News Agency reported.
The comments, which follow recent statements from the central bank that it hasn't lowered the floor for first-home mortgage rates, were made in response to some media reports that Beijing would loosen property credit policies, Xinhua said.
Banks are allowed to offer a discount of as much as 30% to benchmark interest rates to first-time home buyers, and have been encouraged by the government to support such buyers.
Banks are required to charge buyers of second homes mortgage rates that are 1.1 times benchmark interest rates, and aren't allowed to extend loans to buyers of third or subsequent homes.
wsj.com
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