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Home prices rise in more Chinese cities

Source:Xinhua Published: 2013-1-20 11:52:31

More Chinese cities saw home prices rise in December month on month despite the government's continued firm stance on property market controls, the latest data indicated.

According to figures released on Friday by the National Bureau of Statistics (NBS), December 2012 saw 54 of a statistical pool of 70 major Chinese cities, up from 53 in November, record higher new home prices than a month earlier. This marked a third consecutive month of such increases.

New home prices in eight cities declined last month, down from 10 in November, while those in the other eight cities were unchanged.

On a year-on-year basis, 40 cities saw rises in new home prices last month, sharply up from 25 in November. Prices in 26 cities dropped year on year, down from 41 in November.

The Chinese government has adopted an array of measures like restricting third-home purchases and introducing property tax trials to cool the runaway real estate market since 2010, which used to be the key economic driver for the country in recent years.

However, home prices started to rebound unexpectedly since the second half of 2012, shored up by the country's pro-growth policies, including two consecutive interest rate cuts and the lowering of banks' reserve requirement ratio.

Boosted by government support, China's economic expansion quickened to 7.9 percent in the Oct.-Dec. period last year, lifting the full-year performance to 7.8 percent after hitting a near three year low in the third quarter, according to NBS data released Friday.

Major property developers also filed eye-catching annual financial reports for 2012, indicating the market has to some extent recovered from the lackluster performance in the first half of last year.

Poly Real Estate Group, China's second-largest property developer, reported that its net profits increased 28.69 percent year on year to 8.41 billion yuan, shored up by rising sales resulting from government efforts to stabilize economic growth.

China Vanke Co., another leading property developer, said its transaction volume surged 16.2 percent to 141.23 billion yuan (22.51 billion US dollars) in 2012.

Meanwhile, as real estate developers slowed down activities, there are warnings of shrinking supplies in the property market.

In 2012, full year investment in the country's property sector amounted to 7.18 trillion yuan, up 16.2 percent year on year. However, the pace is 11.9 percentage points lower than the level in 2011, according to NBS data.

In addition, construction began on 1.77 billion square meters of housing last year, down 7.3 percent from the 2011 level.

Yang Hongxu, vice president with Shanghai-based R&D Institute of E-house China, warned of the risks of accelerating housing price growth this year.

It is necessary for central government to implement stricter curbs with more targeted measures on the property sector to prevent a possible price hike, Yang said.

However, Li Zhiying, a USreal estate analyst, said she expected that China's policies on the property sector will basically remain unchanged in 2013, and the government will continue to support first-home buyers.

China's repeated stance on urbanization as the country's future economic driver will significantly influence the real estate sector, said Li.

As part of the curbs, the authorities will carefully study reforms of the property tax system to cover home transactions and ownership, Chinese Premier Wen Jiabao said Tuesday during an inspection tour at the Ministry of Finance.

A property tax in the cities of Shanghai and Chongqing was introduced on a trial basis in 2011 in a bid to help cool the real estate market.

Jiang Weixin, minister of housing and urban-rural development, pledged that China will "unswervingly" carry forward with property controls, citing the expansion of property tax trials and stepping up affordable housing construction.

He also vowed to closely monitor the sector and urged local governments to shoulder responsibilities in real term.
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