Home prices in Sanya continue to fall for a second month in April
Prices of new commercial homes in April increased from the previous month in 56 of the 70 cities surveyed by the NBS, compared to 50 cities reporting month-on-month growth in March.
New home prices declined from a month ago in nine cities while prices were unchanged in five cities, and 26 cities posted smaller monthly price gains than in March. All of the cities that experienced home price hikes posted increases of less than 1 percent, said the NBS.
Just 41 cities reported month-on-month price increases for resold housing units in April, down from 44 in March, according to the NBS.
Sixteen cities reported month-on-month price declines for secondhand homes in April. Secondhand home prices stayed unchanged in 13 cities, up from 10 in March, the NBS said.
Looking at annual figures, three major cities reported year-on-year declines in new commercial home prices last month, up from two in March. A total of 52 cities saw year-on-year growth in new home prices, said the NBS.
Secondhand home prices dropped in eight cities from one year ago, while 45 cities reported declines in year-on-year price growth from a month ago.
The NBS stopped releasing overall housing prices for 70 major cities in January, as the price figures failed to reflect regional differences, it said. The NBS is also using a new surveying method to determine price changes.
The Chinese government has repeatedly stressed its efforts to cool the runaway property market and adopted various measures to curb rising property prices, including restricting residents in major cities from buying second or third homes, requiring higher down payments for mortgages and instituting new property taxes in the cities of Chongqing and Shanghai.
In the latest move to tighten real estate credit, China Construction Bank, China’s second largest lender, said last week that its branches in the country’s eastern Zhejiang province raised the minimum down payment for first-time home buyers to 40 percent from the national standard of 30 percent.
Hangzhou, capital of Zhejiang and one of the cities that had experienced the largest home price increases in the past years, was among the three cities that reported year-on-year declines in new home prices last month, with new home prices down 1.2 percent from a year ago in April.
Also, in Sanya in south China’s Hainan province, new home prices continued to fall for a second month, dropping 0.9 percent from the same period last year.
The government has also introduced a raft of new monetary policies that have raised borrowing costs for developers and tightened liquidity in the market, including bank interest rate hikes and raised bank reserve ratios.
The People’s Bank of China (PBOC), the country’s central bank, said Wednesday that the growth in property developers’ bank settlement accounts in China’s hottest property markets has started to decline.
Growth rates of property developers’ bank settlement accounts fell significantly in the first quarter of the year in the municipalities of Beijing and Shanghai and the provinces of Guangdong and Jiangsu.
Month-on-month growth rates in these areas were lower than the industry’s national average level of 4.1 percent for the fourth consecutive quarter, the bank said in a report.
In Beijing, where the municipal government is aiming for a moderate decrease in the prices of new residential housing in 2011, both new home and secondhand home prices rose 0.1 percent in April from March, according to the NBS figures.
In Shanghai and Chongqing, where new property taxes have been in place since the start of the year, new home prices have risen 0.3 percent on a monthly basis.
Yang Hongxu, an analyst with the Shanghai-based E-house China Research and Development Institute, said the fluctuation in China’s home prices shows that the property market is still in a stalemate.
"There was not a clear trend of whether [prices] are going up or down," he said, who believes that the rising trend in April is not likely to continue due to shrinking property transactions.
Figures from the NBS show that sales of residential housing in China dropped to 72.55 million square meters in April, down from 95 million square meters in March.
But if the price growth continues in coming months, there could be a new round of market curbs, as further growth indicates the weakening of current policies’ effects, said Yang.
Chen Guoqiang, director of the real estate research institute of Peking University, was more optimistic, noting that all of the cities that experienced home price hikes posted smaller month-on-month growth.
It takes time for the market to digest government policies, he said.
Chen expects that more developers will adjust their pricing strategies as the government sticks to its tightening policies.
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