Date
27 July 2017
Property prices on the secondary marked cooled last month in major Chinese cities as authorities introduced some tightening measures. Photo: Bloomberg
Property prices on the secondary marked cooled last month in major Chinese cities as authorities introduced some tightening measures. Photo: Bloomberg

China property resale market cools but broad falls seen unlikely

China’s property resale market cooled in April due to intensified government curbs, but chances are slim that prices would fall across the board, a top state think-tank said on Monday.

Average prices for existing homes were up 1.75 percent in April from a month ago, compared to a 2.66 percent increase in March, the National Academy of Economic Strategy of the Chinese Academy of Social Sciences (CASS) said in a report, according to Reuters.

The think-tank, under China’s cabinet, analyses prices recorded through online transactions in 30 major cities.

It said “wild” price gains in March were contained after the government introduced “swift and intensive” tightening measures in many cities.

But it’s extremely unlikely for prices to fall “across the board” in future, the think-tank said, adding that some cities with low inventories will continue to see rapid price rises.

In the biggest cities, “housing supply will remain insufficient both in the short- and longer-term. So it’s hard for property prices to fall dramatically just due to housing policy or monetary policy tightening,” it said.

“As long as population inflow to the big cities doesn’t change momentum, residential housing supply will remain insufficient in those cities in the long-term.”

Beijing has become the most expensive city with a median price of 63,647 yuan (US$9,231) per square meter in April, or US$858 per square foot, followed by Shanghai, Shenzhen and Xiamen.

The report recommended policymakers keep restrictions in place to further stabilize prices, and utilize the planned Xiongan economic zone to experiment with ways to tackle housing supply issues.

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RC

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