China’s first-tier new home prices flat in July, ending four-month rebound
China’s real estate market slump has weighed on the economic situation for more than 5 years, but the market has obtained grip in latest months on the back of a raft of supportive government policies.
“Whilst m-o-m new home rate analyses for second-tier cities were close to stopping their fall, the latest data show partially deeper decreases, pointing to more pressing needs to stabilise their real estate industry,” stated Yan Yuejin, vice-president of Shanghai-based property consultancy E-house China Research and Development Institute.
“We believe a further move will hinge on recognition of an earnings recovery and a broader physical industry recovery. We remain positive and expect home rates to stabilise even more, underpinned by durable luxury need and healthy secondary-market liquidity,” Kwok stated.
Shanghai and Shenzhen saw brand-new home prices border up 0.2% in July from June, while Guangzhou posted a 0.1% gain, according to data published by the National Bureau of Statistics (NBS) on Aug 17. By comparison, they dropped 0.3% in Beijing.
New home rates in China’s 4 first-tier cities were flat generally in July from June, bringing an end to a four-month rebound, as analysts claimed m-o-m analyses had weakened in the middle of seasonal headwinds and an unusually rainy summer, additional highlighting the seriousness of securing the nation’s property market.
Michelle Kwok, head of Asia real estate and Hong Kong equity research at HSBC, said in a report last week that a potentially robust September– October peak period, ongoing land-market toughness and the release of pent-up need after an unusually wet summer sustained a reassessment of sector risk-reward.
On the other hand, brand-new home prices in second-tier cities bordered down 0.1% m-o-m in July, turning around June’s flat analysis, the NBS said.
She added that the bank continued to see greater capacity for good incomes surprises among residential property developers.
Among 70 large and medium-sized Chinese towns traced nationwide, 23 saw m-o-m boosts or flat efficiencies in July, 2 greater than in June, the bureau said.
Shanghai was the only first-tier city to report a y-o-y rise, that increased 3%. Beijing observed rates drop 2.3%, Guangzhou was down 2.2% and Shenzhen 2.9%, but the pace of decline tightened in Guangzhou and Shenzhen.
On a y-o-y basis, prices in first-tier cities were down an average of 1.1% in July, narrowing the decline by 0.2 percentage points from June.
“In the middle of broad market changes this year, the moderating y-o-y decrease in brand-new home costs is a motivating indication that the real estate industry is continuously finding its ground,” Yan said.
