Home prices up for first time in 10 months

Shanghai Daily, July 3, 2012

Home prices in China rose for the first time in 10 months in June amid steadily recovering sales in major cities.

Prices edged up 0.05 percent from May to 8,688 yuan (US$1,376) per square meter in 100 major cities across the country, ending a losing streak since September 2011, according to China Index Academy research released yesterday.

Prices dropped in 45 cities, compared with 73 in May, with 12 seeing falls of more than 1 percent, 5 percent fewer.

Gains were posted in the other 55 cities, with 11 recording increases of more than 1 percent, up 3 percent from May.

Year on year, however, home prices in the 100 cities have fallen 1.9 percent on average. Sixty-seven cities saw a loss in value, compared with 60 cities in May, the academy said.

"New home purchases continued to rebound in major cities since March and a recently fine-tuned monetary policy further helped trigger buyers' sentiment," the academy said in a statement. "Some real estate developers recently stopped offering discounts or even raised their prices amid robust sales, leading to the slight price increase in June."

The average cost of homes in the 10 largest cities, including Shanghai, Beijing, Guangzhou and Chongqing, climbed 0.75 percent from May to 15,429 yuan per square meter, with Beijing registering the biggest increase of 2.3 percent.

Tianjin and Hangzhou were the only two cities among the 10 that reported monthly drops, shedding 0.6 percent and 0.1 percent, respectively.

New home sales fell 13.5 percent year on year to 255.52 million square meters across the country between January and May, recovering from a 14.9 percent annual drop recorded during the first four months of this year, the National Bureau of Statistics said last month. In Shanghai, new home purchases soared to their highest level in 17 months in June, according to latest market research released on Sunday.

Huang Zhijian, chief analyst with Shanghai Uwin Real Estate Information Services Co, said: "The two chops in bank reserve requirement ratio and one cut in interest rate by the central bank in the first half of this year have prompted a consensus among more people that the housing market could have reached its bottom despite property curbs including the home-purchase restriction remaining strictly enforced."