China's red-hot property market picked up pace in February after pulling back for four months, with average new home prices in the nation's 70 major cities rising slightly in spite of a raft of new government curbs aimed at tempering speculative demand.
China’s red-hot property market picked up pace in February after pulling back for four months, with average new home prices in the nation’s 70 major cities rising slightly in spite of a raft of new government curbs aimed at tempering speculative demand. Compared with a month earlier, new home prices rose 0.3 percent, quickening from January’s 0.2 percent increase, according to Reuters calculations from data issued by the National Bureau of Statistics (NBS) on Saturday.
The monthly gain in price growth suggested speculation has yet to be contained even with more local governments rolling out restrictive measures amid fears that a furious rally over the past year could trigger a crash.
China’s property sales unexpectedly surged in the first two months of the year despite government measures to cool the market, though growth in real estate investment eased slightly, according to official data released on Tuesday.
On Friday, Beijing’s municipal government announced new steps to rein in its booming housing market, raising the down payment requirement for second home purchases in the city to at least 60 percent from 50 percent.
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Hot markets such as Hangzhou and Nanjing were among the latest major cities to step up their fight against property speculators, as authorities fret over resurgent price growth that has shown only modest signs of abating.
Speculators also appeared to be venturing into smaller markets with more relaxed housing purchase policies. Surging price growth in satellite cities near some of the country’s sprawling metropolises have prompted authorities to also impose purchases bans.
While prices were flat or declined slightly month-on-month in most of the biggest cities, home prices in many smaller cities picked up.
New home prices rose 11.8 percent from a year ago, compared with January’s 12.2 percent gain, according to NBS data.
Shenzhen, Shanghai and Beijing prices rose 13.5 percent, 21.1 percent and 22.1 percent, respectively, from a year earlier, all slower than January annual growth rates.
On a monthly basis, Shenzhen prices fell 0.6 percent, Shanghai gained 0.2 percent, and prices in Beijing were flat.
China’s policymakers have vowed to keep the property market stable and stem speculation this year. After the annual parliament closed on Wednesday, the government added a pledge to contain fast-rising home prices to its work report, as the property market resists cooling measures and purchase restrictions spread out from the biggest cities.
The banking regulator and central bank have told banks to curtail mortgage lending, state newspaper Economic Information Daily reported on Monday, citing unnamed banking sources.
Central bank data published on March 9 showed household loans, mostly mortgages, accounted for 25.7 percent of new loans in February, down from 37 percent in January and 50 percent in 2016.
China’s central bank raised its short-term interest rates for the third time this year on Thursday – after the U.S. Federal Reserve raised its rates – a move analysts said would make mortgages less attractive for Chinese banks as costs rise.