China’s Housing Decline
China’s January home prices recorded their worst performance in at least a year, with none of the 70 cities monitored by the government posting gains. China’s leadership expects to maintain its property price dampening efforts in an attempt to ease the pressure on what could be a large domestic real estate bubble.
Prices in 47 of the cities fell, while home values in the remaining 23 were unchanged from December, the National Statistics Bureau said in a statement on its website today. New home prices in the nation’s four major cities of Shanghai, Beijing, Shenzhen and Guangzhou declined for a fourth month. The data reflects a two-year effort by China to battle rising home prices with measures ranging from higher down payments, mortgage rates to home purchase restrictions in 40 cities.
“The falling downtrend of home prices will strengthen in coming months as the government tightening continues,” said Alan Jin, a Hong Kong-based property analyst at Mizuho Securities Asia Ltd. “The figures won’t prompt the central government to release the curbs any time soon, because it probably would like to observe and study the market further.
China won’t waver on its real-estate controls and efforts to bring home prices down to a reasonable level to ensure fairness and stability, Premier Wen Jiabao said during a meeting with business executives on Feb. 12.