China New Home Prices Pick Up in October New home prices in China continued to climb in October, driven by strong demand in major cities, a private-sector survey showed. Prices in 100 cities rose 10.69% on average year-on-year in October, recording the highest growth rate since records became available in June 2011, data tracker China Real Estate Index System said Friday. Prices rose 9.48% on year in September. On a month-on-month basis, prices accelerated for the fourth straight month--up 1.24% from September, when they rose 1.07% from August. The higher prices are unlikely to trigger any immediate government intervention following recent comments by Chinese President Xi Jinping calling for more housing supply. The president didnt mention home prices in his lengthy remarks, suggesting that further price controls are unlikely. The acceleration in home price growth isnt taking place across the country. Rather, it is concentrated in major cities, where there is a shortage of supply, analysts and property developers said. Though land purchases by developers and construction starts have picked up recently, theres typically a nine-month lag before those translate into sales. Earlier this week, Mr. Xi said the government must focus on ensuring that needy people have adequate housing, while the market should satisfy tiered demand in the rest of the housing sector. Housing costs have been climbing rapidly in recent months, raising speculation that the government might decide that new measures are needed to tame prices on top of existing restrictions. But analysts said the presidents remarks signal that the government is willing to tolerate higher prices at the top end of the market, provided there are more affordable homes for those with lower incomes. Government researchers and analysts also said that policymakers are focusing their efforts on long-term measures such as a property tax and land reform to control the property market rather than the short-term administrative curbs that they have used in the past which have delivered mixed results. There are widespread expectations that these reforms will kick in after a pivotal Communist Party meeting that will be held Nov. 9-12 known as the Third Plenum, at which leaders will discuss and propose reforms. According to the China Real Estate Index System survey, fewer cities showed a pickup, with 75 cities registering higher month-on-month prices in October compared with 79 in September. Prices in Changshu grew the fastest, by 3.92%. In Beijing, new home prices were 2.56% higher, moderating from Septembers 3.75% rise. Plans by the local housing bureau in Beijing to ramp up supply of cheaper homes changed expectations in the local property market, said CREIS. In Shanghai, prices rose 2.35%, up from Septembers 1.13% gain. Another property survey that covers more cities in China also showed that the rise in new home prices is accelerating and that the gains are largely confined to major cities. Prices of new homes in 288 cities tracked by real estate services provider E-House China rose 0.83% in October from September after rising 0.42% in September from August. Prices climbed 10.5% in October from the same month a year earlier compared with 10.4% rise in September.
Posted on: Fri, 01 Nov 2013 06:12:52 +0000
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