China house prices rise in Dec, first year-on-year increase in 9 months

BEIJING (AFP) - China's home prices recorded their first year-on-year increase in nine months in December, an independent survey showed on Friday, but it said a huge rebound nationally was unlikely.

The cost of a new home in 100 major cities averaged 9,715 yuan (S$1,926) per square metre last month, up a marginal 0.03 per cent from December 2011, the China Index Academy (CIA) said.

Prices rose 0.23 per cent from November, the seventh consecutive monthly rise, it said in a statement.

Property costs are a key social issue in China, where millions of would-be buyers have been priced out of the market, fuelling resentment.

The central government has sought to control residential property prices for the past two years, with measures including restrictions on second and third home purchases, higher minimum downpayments, and annual taxes in some cities on multiple and non-locally-owned homes.

The moves cooled the once red-hot market, but demand remains pent-up and government monetary policy has eased in recent months.

"Looking into 2013, the property sector is expected to continue the trend in 2012 to stabilise and recover under the conditions that the economy stabilises and recovers and the strength of current policies remains unchanged," said CIA.

"But a massive rebound across the board nationwide is rather unlikely as the destocking of new projects whose construction started in the past two years is far from ending," it added.

Most property developers put off launching new projects and kept prices stable last month after reaching their full-year sales target, it said, adding that the central government's repetition of its determination to maintain curbs on the industry also prevented a sharp rise.

The average new home price in Beijing stood at 24,518 yuan per square metre, up 0.53 in a month and up 3.31 per cent year-on-year. In Shanghai it was 27,034 yuan per square metre, up 0.31 per cent on November but down 0.65 per cent over a year.

CIA is owned by SouFun holdings, China's biggest real estate website operator.

New properties are the most important part of China's real estate market and the survey covers prices of both apartments, including those with prices regulated by the authorities, and houses.

Data is collected every month by on-the-spot surveys and through reports by estate agents, property developers and officials.

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