China's skyrocketing property prices have been effectively curbed by the government's year-long campaign to restrain the sector, a senior official at China's National Bureau of Statistics (NBS) said Wednesday, without offering any sign that the country would drop its tightening policy this year.
"China's major cities saw a substantial decline in real estate prices, indicating that the government's efforts have achieved positive progress," said NBS deputy head Xie Hongguang in a statement released on the bureau's website yesterday.
Residential property prices fell in 52 of the 70 major cities monitored by the bureau in December, while prices in only three of them declined in January last year, the statement said.
Analysts and market watchers believe a general downward trend of the country's property prices has formed, and will not be reversed.
"The market is moving in a direction that the central government has wished for, and tightening measures will continue to be strictly implemented," said Yin Zhongli, a researcher with the Chinese Academy of Social Sciences.
"The sector is not dominated by significant housing demand, but there is still a lot of speculation. So there's limited pent-up demand to keep prices buoyant," he noted, predicting that real estate prices and investment would shrink drastically this year.
Liu Hongyu, a professor with the Institute of Real Estate Studies at Tsinghua University, said he believes the government should be careful in handling the negative impact of property tightening on the macro economy, particularly in terms of bank loans and the stock market.
"As the policy continues, the risk of a hard landing and pressure on local government finances are escalating," he said
There has been a new round of price cuts this week by China's biggest property developers. Most of them announced sales declines in January and hope to boost their business by offering discounts.
Poly slashed prices at a Hangzhou-based project Monday from 23,000 yuan ($3,622) per square meter to 17,800 yuan per square meter.