New home prices continue upward momentum
January 25, 2016 Category Real estate, Weekly
New home prices in China continued their upward momentum in December, although the recovery remains uneven. Month-on-month increases were recorded in 39 of the 70 cities covered, up from 33 in November, the National Bureau of Statistics (NBS) said. On a year-on-year basis, prices in the 70 cities rose an average of 7.7% in December from a year earlier. However, 49 cities saw a decline in prices compared with a year ago. Losses in most cities were offset by strong gains in the largest cities. Among first-tier cities, Shenzhen saw the biggest gain with a 3.2% increase over November and a 47.5% surge over a year earlier. Shanghai rose 2.1%, up 18.2% from a year ago. Beijing at 0.5% and Guangzhou at 0.7% saw more modest increases. Fueled by stimulus measures such as lower down-payment requirements, new home prices have been rising since May. Five interest rate cuts last year helped to bring mortgage rates to their lowest in five years. The divergence was also reflected in sales. Of the 50 cities monitored by the China Real Estate Index System, sales in first-tier cities surged 34.2% as measured by floor space in December over November, but in second-tier cities sales rose just 7.9%. Those in third-tier cities rose 10.6%. The continued drawing down of the housing inventory, along with the central government’s pledge to further cut the housing glut, has pushed expectations of further rises in prices and sales in 2016, the China Daily reports.
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