House price rises cool down in major cities

A housing project under construction in Lu'an, Anhui province. Home prices continue to rise in China's major cities but at a slower pace, according to the National Bureau of Statistics. ZHENG JINQIANG / FOR CHINA DAILY

Although new home prices rose year-on-year in 69 of the mainland's 70 major cities in May, analysts said adherence to property curbs will eventually stabilize housing prices.

The National Bureau of Statistics said on Tuesday that of the 70 major cities it tracks, only Wenzhou in Zhejiang province experienced a drop in new-home prices in May.

Guangzhou, Shenzhen and Beijing led the price surge in new residential properties, up around 15 percent.

On a monthly basis, 65 cities' new-home prices increased in May, three other cities saw declines and the other two were unchanged.

Liu Jianwei, a senior statistician with the bureau, said the figures show home price rises continued slowing in May because fewer cities saw price rises compared with April.

Another distinct change is that the month-on-month growth in home prices is narrowing, according to Liu. In 34 cities, new-home prices increased by a smaller percentage point compared with April. For pre-owned houses, 30 of the 70 cities' growth rates declined.

Liu said that continued property curbs meant the month-on-month increase rate in home prices was going down. He said there should be no relaxation of policy implementation.

"The days of over-supply are gone, and at present, the total available residential properties in Beijing can be taken up within seven months. For Shanghai, it's nine months," said Chen Yanbin, research director of the China Index Research Institute's Shanghai branch.

Chen Sheng, deputy president of the China Real Estate Data Academy, said all the government should do is maintain policy stability.

"As long as the home price increase is in line with the growth of the nation's economy, there is no reason to worry about severe property inflation," he said.

Chen said first-tier cities are seeing faster-than-expected home price rises. Major second- and third-tier cities have excess supply, and their chief task is to reduce inventories.

Lu Qilin, research director at Shanghai Deovolente Realty Co, also expects slower growth in home prices in the coming months due to the stabilized policy and economy.

"Policy implementation is necessary and it is the key," he added.