China’s overheated property market is likely to show a slower pace of sales growth this year due to tightened regulations, a top credit ratings agency has said. “We expect nationwide contracted sales in 2017 will be largely flat or will see a slight decline from 2016, after buoyant growth that year,” Chris Wong, an analyst at Moody’s Investors Service said in a report released yesterday.
China’s contracted sales grew by 36.2 per cent year-on-year to a record high of 9.9 trillion yuan (USD 1.4 trillion) last year, driven by growth in both sales volumes and average prices, state-run Xinhua news quoted the report as saying. The growth in December, however, slowed from that seen in the first three quarters after the Chinese government implemented tightening measures from late September to cool the sector, Wong said.
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Dozens of Chinese cities have announced measures, including purchase limits and tightened mortgage restrictions, to prevent housing prices rising out of control. These policies have started to pay off.
In December, of the 70 major cities monitored by the National Bureau of Statistics, 46 saw their new housing prices climb month on month, down from 55 in November and 62 in October.
Meanwhile, 20 cities reported month-on-month price declines, increasing from 11 cities in November and seven cities in October.
Moody’s also forecast that low inventory levels in China’s first- and second-tier cities will reduce the risk of property price corrections in the next six months.