China’s housing market led by first-tier cities is showing signs of regaining stability on the back of recent supportive measures, indicating the current downturn in home prices might have been checked for now, paving the way for a mild recovery, industry experts said. In September, China’s top four cities – Beijing, Shanghai, Shenzhen and Guangzhou – extended year-on-year recovery in prices of new homes, which rose by 0.7% but were flat month-on-month. In month-on-month terms, pre-owned home prices in the four cities rose by 0.2%, the first positive growth after four months of continuous declines. In smaller Chinese cities, however, prices of new and pre-owned homes showed different trends, according to the National Bureau of Statistics (NBS). Out of the 70 Chinese cities tracked by the NBS, 45 reported year-on-year declines in new home prices in September. In August, 44 cities had reported such declines, said Shen Yun, Senior Statistician with the NBS’ Urban Division.
The decline in the average home price index has slowed in September, suggesting policies on home purchases introduced since August have started to produce positive effects, said Yan Yuejin, Director of the Shanghai-based E-house China Research and Development Institution. “The measures have had a positive effect on both market performance and expectations, thus promising stabilization of the home price index in the coming months,” Yan said. New home prices in 31 second-tier cities slipped 0.3% month-on-month on average in September, but grew by 0.2% year-on-year. New home prices in 35 third-tier cities slid 0.3% month-on-month, but dropped 1.4% year-on-year.
“September data showed the decline in the home price index has been curbed with first-tier cities taking the lead in recovery,” said Yan. It appears the home price index has passed its lowest point, and efforts should be made now to consolidate the existing positive effect of supportive policies in the fourth quarter, so as to push the index toward stability and recovery, Yan said. In September, housing policies were adjusted or eased many times. “With the policy measures starting to produce positive effects, the housing market is seeing improvements,” said Chen Xiao, Senior Analyst with the Zhuge Real Estate Data Research Center, adding the recovery trend is more evident in the pre-owned housing market, the China Daily reports.
