China home prices up in fewer cities amid curbs

BEIJING • China's home prices increased in fewer cities last month in the wake of cooling measures imposed by the local authorities.

New-home prices, excluding government-subsidised housing, rose from the previous month in 56 of 70 cities tracked by the government, compared with 58 in April, the National Bureau of Statistics said yesterday.

Prices fell in nine cities and were unchanged in five.

In the capital Beijing, the scene of the nation's tightest property restrictions, prices of new homes were unchanged from the previous month, and prices of existing homes fell by 0.9 per cent, the first decline since February 2015.

It was the second straight month that the number of cities with price increases has fallen, as officials persist with curbs to take the froth out of bubbly markets.

A deepening property slowdown could trim the nation's economic growth rate, with UBS Group forecasting that sales will "lose more steam" in the second half.

In Shenzhen, China's hottest market early last year, new-home prices fell 0.6 per cent from April, the sharpest fall in three months. In the financial hub Shanghai, where people protested on the street this month about some housing curbs, new-home prices were unchanged.

So far, demand in smaller cities, where the local authorities are trying to clear a build-up of housing stock, is helping to support the overall market.

Sales of new homes rose 13 per cent to 871 billion yuan (S$177 billion) last month from a year earlier, exceeding an 8 per cent gain in April, according to Bloomberg calculations based on data released last Wednesday by the National Bureau of Statistics.

Analysts including Patrick Wong and Kristy Hung of Bloomberg Intelligence say the Chinese housing market may weaken in the second half on government curbs and rising mortgage rates.

The average borrowing cost for first-residence buyers jumped 0.21 percentage point to 4.73 per cent last month from April, according to Rong360, a platform that tracks lending across China.

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A version of this article appeared in the print edition of The Straits Times on June 20, 2017, with the headline 'China home prices up in fewer cities amid curbs'. Print Edition | Subscribe