China Property Market to Face New Pressures | Waccabuc NY Homes
China's red-hot property market likely will face new pressure next year, as local governments move to cool the market and developers build on new supplies of land.
A slowdown in house-price increases—which have posted double-digit increases for months—could help Beijing in its campaign to keep housing affordable for its vast population. But it isn't clear whether either trend will be enough to tame the market in the face of strong demand to buy homes.
Already the market, while still strong, is showing hints of moderating. Over the weekend, a private-sector survey showed that average new home price growth is slowing on a month-by-month basis, even as it set a record for growth compared with a year ago.
The survey, by data provider China Real Estate Index System, tracks new home sales in 100 Chinese cities. It said on Saturday that the average price last month rose 0.68% compared with October. That marks a slowdown from 1.2% between October and September and the first deceleration in four months.
On a year-over-year basis, prices rose nearly 11% in November, surpassing the previous record of about 10.4% in October.
Another property survey, released on Sunday, that covers more cities in China also showed that the rise in new home prices is moderating. Prices of new homes in the 288 cities tracked by real estate services provider E-House China rose 0.77% in November from October, after rising 0.83% in October from September. Compared with a year earlier, prices climbed 10.1% in November compared with a 10.5% rise in October.
Real-estate prices present a quandary for Beijing. The property sector contributes significantly to China's economy, which is slowing compared with the growth rates of above 8% in previous years. At the same time, strong price growth put housing out of reach for many Chinese, increasing the possibility of instability.
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