BUSINESS China's housing prices ease amid speculation curbs

BUSINESS

China's housing prices ease amid speculation curbs

China.org.cn

10:26, October 21, 2021

Aerial photo taken on Feb. 17, 2020 shows buildings under construction in Nanguan District of Changchun City, northeast China's Jilin Province. (Photo: Xinhua)

China's property market continued to ease in September amid strict government regulations to curb housing speculation, official data showed Wednesday.

New home prices in four first-tier cities stood unchanged in September from a month earlier, compared with month-on-month growth of 0.3 percent in August, data from the National Bureau of Statistics (NBS) showed.

Prices of second-hand homes in the four cities edged down 0.4 percent last month from that in August, reversing the mild month-on-month increase seen in August.

A total of 31 second-tier cities also saw no month-on-month change in new home prices, while 35 third-tier cities saw a month-on-month decline of 0.2 percent in new home prices.

The latest data came amid the country's strict housing sector regulations, which follow the principle -- "housing is for living in, not for speculation."

Since the beginning of this year, China has implemented a "long-term mechanism" governing the property sector, curbing housing acquisitions by speculators while supporting purchases by families with pressing needs, said NBS spokesperson Fu Linghui.

Under this mechanism, local governments introduced city-specific measures to keep land and home prices stable. Regulators closely monitored loans to home buyers and real estate companies amid the regulations.

Wednesday's data showed that China's over-five-year loan prime rate, a market-based benchmark lending rate on which many lenders base their mortgage rates, remained unchanged from the previous reading of 4.65 percent, said the National Interbank Funding Center.

The latest NBS data showed that the country's property investment rose 8.8 percent, year on year, in the first nine months, slower than the 10.9-percent growth seen in the first eight months.

"The housing market has remained generally stable, with steady investment, sales, and prices," Fu said.

While some worry that tight property market regulations could weigh on the overall economic growth, Fu said that the impact is "limited", as the average growth rate of real estate sector output for the past two years dipped only mildly in the first three quarters.

In a September meeting on real estate sector finance, the country's central bank and the top banking regulator reiterated that "housing should never be used as a short-term stimulus for economic growth."

As China further diversifies housing supply through various channels and facilitates the property rental market, market behavior would become more rational, contributing to the stable development of the housing market, Fu said.

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