China August Home Prices Rise in Fewer Cities Easing Policy Woes - Bloomberg

By Bloomberg News - 2012-09-18T03:15:47Z

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Chinese Home Prices Drop During August in 19 Cities

China’s new home prices rose in fewer cities in August, reducing concerns that the government may issue new tightening measures.

Prices climbed in 35 of the 70 cities the government tracks from a month earlier, according to data released by the statistics bureau today. That compared with 49 cities in July, the most in 14 months. The eastern city of Wuxi and the central city of Zunyi led the month-on-month gains, while among major cities prices advanced in Beijing.

Buyers, buoyed by two central bank interest rates cuts in July to spur economic growth, have countered government pledges to maintain real estate curbs it began introducing in April 2010 to ensure housing remains affordable. The property measures have achieved “obvious results” and the rapid increase in prices are under control, while the government needs to firmly rein in buying for speculation and investment, the official Xinhua News Agency reported on Sept. 1, citing Premier Wen Jiabao’s comments during an inspection tour in Tianjin.

“The gains in fewer cities reduced concerns about more property tightening measures,” Jinsong Du, a property analyst at Credit Suisse Group AG, said in an interview in Shanghai. “What’s happening in reality is that home prices are still rising. It’s easy for local governments to manipulate data as they could simply stop granting permits for high-price projects.”

‘Particular Attention’

A gauge tracking property shares in Shanghai rose 0.2 percent as of 11 a.m., the only industry group to advance among the five on the benchmark.

New home prices fell in 19 cities and were unchanged in 16, today’s data showed. In Wuxi and Zunyi prices climbed 0.5 percent from July.

An inspection in July ordered by the State Council found recent increases in prices and easing policies by some local authorities among issues that needed “particular attention,” the official Xinhua News Agency reported on Aug. 17.

Among the major cities, Beijing and the southern economic hub of Shenzhen rose 0.1 percent from July, while new home prices in Shanghai were unchanged, according to today’s data.

Private data also pointed to a housing market that continued to pick up. China’s home prices rose for a third month in August, SouFun Holdings Ltd. (SFUN), the nation’s biggest real- estate website owner, said on Sept. 3.

‘Losing Steam’

Existing home prices in Beijing and Shanghai rose 0.3 percent from July, today’s data showed.

“Home prices are losing steam after a couple of months of rallying and the market is stabilizing because there is no more upcoming monetary easing and the curbs still remain in place,” Wei Yao, a Hong Kong-based economist at Societe Generale SA, said in a telephone interview today. “Buyers are keeping a wait-and-see stance.”

The value of home sales transactions rebounded by 0.6 percent in August after dropping 14.5 percent in July from June, according to the statistics bureau data.

China Overseas Land Ltd. (688), the country’s biggest developer traded in Hong Kong, posted an 80 percent jump of sales in August from a year earlier. Longfor Properties Ltd., the developer controlled by China’s richest woman Wu Yajun, said August sales jumped 12 percent from a year ago.

Peak Season

Sales momentum will remain strong in September and October, the traditional peak season for property, boosting nationwide sales in the second half by 15 percent to 20 percent from the first six months, Citigroup Inc. analysts, led by Oscar Choi, wrote in a report last week.

In its more than two-year effort to curb the property market, China has raised down-payment and mortgage requirements, imposed a property tax for the first time in Shanghai and Chongqing, increased building of low-cost social housing, and placed home purchase restrictions in about 40 cities.

Chinese developers with improved sales and cash flows are showing renewed interest in land acquisitions. Seven of China’s biggest real estate developers by market value, including China Vanke Co., bought land worth 8.9 billion yuan ($1.4 billion) in major cities in the first week of September, China Daily reported last week.

Chinese regulators are monitoring land sales after a recent pickup in activity in the property market, China Securities Journal reported on Sept. 14, without saying where it obtained the information.

To contact Bloomberg News staff for this story: Bonnie Cao in Shanghai at bcao4@bloomberg.net

To contact the editor responsible for this story: Andreea Papuc at apapuc1@bloomberg.net

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China August Home Prices Rise in Fewer Cities Easing Policy Woes

The property measures have achieved “obvious results” and the rapid increase in prices are under control, while the government needs to firmly rein in buying for speculation and investment, the official Xinhua News Agency reported on Sept. 1, citing Premier Wen Jiabao’s comments during an inspection tour in Tianjin.

The property measures have achieved “obvious results” and the rapid increase in prices are under control, while the government needs to firmly rein in buying for speculation and investment, the official Xinhua News Agency reported on Sept. 1, citing Premier Wen Jiabao’s comments during an inspection tour in Tianjin. Photographer: Nelson Ching/Bloomberg

Enlarge image

China August Home Prices Rise in Fewer Cities Easing Policy Woes

A man stands near models of homes at the Sino-Singapore Tianjin Eco-city in the Binhai New Area of Tianjin, China.

A man stands near models of homes at the Sino-Singapore Tianjin Eco-city in the Binhai New Area of Tianjin, China. Photographer: Nelson Ching/Bloomberg