Home prices increase in more cities in April
May 26, 2015 Category Real estate, Weekly
More Chinese cities reported house price increases in April, adding to hopes that a property downturn which is weighing heavily on the economy is beginning to bottom out. Increases in new home prices were recorded in 18 cities last month, compared to 12 in March. Prices remained unchanged in four and dropped in the other 48, compared to eight and 50 in March, the National Bureau of Statistics (NBS), which monitors prices in 70 major cities, said. But analysts said that any recovery will take some time given a huge inventory of unsold homes. The property sector remains the biggest risk to the nation’s economy, which looks set for its worst year in 25 years. Policy-makers are expected to roll out more interest rate cuts and other stimulus measures later this year to boost activity. “Nationwide, prices of new homes climbed an average 0.3% in April as buying momentum continued to rebound,” said Liu Jianwei, Senior Statistician at the NBS. “However, price increases were mainly confined to first-tier and a limited number of second-tier cities whereas the rest still suffered declines.” Shenzhen continued to lead gainers among the country’s four first-tier cities with a month-on-month increase of 1.8%, followed by Beijing, Shanghai and Guangzhou, where new home prices climbed 0.8%, 0.7% and 0.4%, respectively, from March. On an annual basis, however, prices dropped in all cities except Shenzhen, where a 0.7% annual rise was recorded for new homes. In the existing home market, 28 cities recorded price increases from a month earlier, compared to 12 in March, the Shanghai Daily reports.
China Daily’s calculation based on NBS data showed sales of residential property rose 16% in April from a year ago in value terms and 7.7% in floor space terms. The market recovery was mostly reflected in the first-tier cities. Official data showed home sales fell 5% in the first four months from a year earlier in terms of floor space, and inventories increased by 3.3 million square meters in April. Real estate investment grew 6% in the January-April period from a year earlier, slowing from a rise of 8.5% in the first quarter. The mortgage rate now is at the lowest since at least 1991 after three rate cuts since November last year, and more are expected. Such strong policy impetus has boosted property shares, led by Evergrande Real Estate Group with a surge of more than 40% over the past month. The boom market has also opened a window for developers to raise funds through new share placements, the South China Morning Post reports.
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