Sanya records decrease in new home prices in July, 2011

PRICES of new homes stopped rising in more Chinese cities in July than in June, according to official data released yesterday.
 
New home prices, excluding affordable housing, either fell or remained unchanged in 31 out of 70 cities across the country, the National Bureau of Statistics said.

That compared with a fall or no change in 26 cities in June, 20 in May and 14 in April.

In Shanghai and Beijing, where rein-in measures such as home purchase restrictions have been rigorously enforced, new home prices were unchanged from a month earlier. They had climbed 0.1 percent in June and 0.2 percent in May.

Nationwide, new home prices in Luzhou in Sichuan Province rose the most, or 0.8 percent month on month, followed by Nanchong in Sichuan and Dali in Yunnan Province, which gained 0.6 percent and 0.5 percent compared to June.

"With existing measures to cool down the country's housing market remaining in place, the central government's efforts since late January to combat soaring home prices and fight asset price bubbles have been affecting the market in a way it had hoped," said Tony Chen, general manager of China Real Estate Information Corp's research center. "With further tightening measures, such as extending limits on home purchases in more smaller cities, we certainly expect to see a cool-down sign in more cities around the country."

Chen said an anticipated list of second and third-tier cities where restrictions on house purchases might be imposed should be released as early as possible to send a signal to the market that the government remains determined to fight speculation.

Earlier, China's housing authority set out conditions to help local governments decide on house purchase restrictions. If just two conditions are met, and they include notable increases in prices or transaction volumes, or being near cities where purchase restrictions are in force, that would suggest action was needed. The announcement was interpreted as a signal the list would be rolled out soon.

Government data also showed that prices for existing homes either dropped or remained flat in 34 cities in July, three more than in June.

On a year-on-year basis, only Sanya in Hainan Province recorded a decrease in new home prices last month, compared to three cities in June. In the existing home market, prices fell in four cities, compared to five in June.