China’s new home prices rose for a seventh month as buyers concerned that prices will surge again boosted sales, according to SouFun Holdings Ltd. (SFUN:US)
Prices in December climbed 0.23 percent from November to 9,715 yuan ($1,559) per square meter (10.76 square feet), the country’s biggest real estate website owner said in an e-mailed statement today, based on its survey of 100 cities. The city of Harbin in the northeastern Heilongjiang province had the biggest gain, with prices jumping 3.7 percent.
The Ministry of Housing and Urban-Rural Development said last month it would support demand from residents seeking bigger homes this year, prompting speculation that authorities won’t add to property curbs including higher down payments and home- purchase restrictions. Beijing has suspended auctions of premier land slots since September to avoid setting new price records that would fuel expectations for further home price increases.
“With the fundamentals in the property market improving at an increasingly faster pace, further home price gains in the first half of this year are a high-probability event,” Luo Yu, a Shanghai-based analyst at CEBM Group, an advisory company, wrote in a report today. “Although the government’s tolerance over home prices has increased, the growing panic about prices may force policy adjustments.”
December home prices were little changed from a year earlier, climbing 0.03 percent, according to SouFun. They snapped eight months of year-on-year declines.
Prices climbed in 53 of the 70 cities the government tracks in November from the previous month, the most in 18 months, the National Bureau of Statistics said Dec. 18.
The following day, Beijing halted the sale of a residential site in an area close to embassies that could have set a record for the capital city, according to broker Bacic & 5i5j Group. The municipal authorities suspended auctions of 10 land parcels in September.
Moody’s Investors Service in November revised China’s property sector to “stable” from “negative” on expectation sales and access to funding will continue to improve in 2013.
“With the preconditions of continued economic recovery and policy maintaining the current status, the real estate industry will hopefully keep its momentum for the better” this year, SouFun said in the statement. “But since the destocking of new projects started in the past two years hasn’t ended, the likelihood of a huge nationwide price rebound is small.”
The government has raised down-payment and mortgage requirements in its more than two-year effort to curb the property market. It also imposed a property tax for the first time in Shanghai and Chongqing, increased construction of low- cost social housing and enacted home-purchase restrictions in about 40 cities.
--Zhang Dingmin. Editors: Malcolm Scott, Andreea Papuc
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