China Sees First Property Market Price Increase in Nine Months

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Jan. 9 – China’s housing prices in 100 major cities averaged RMB9,715 per square meter in December 2012, up a marginal 0.03 percent from a year earlier, according to the China Index Academy (CIA).

Prior to December’s modest increase, China’s national property market had failed to record positive year-on-year growth for the previous eight consecutive months – largely due to government-led efforts to keep property prices in check.

The housing prices in December rose in 57 cities and fell in 43 cities as compared with November. The average price for a new home in China’s 10 largest cities rose 0.45 percent from November to RMB16,157 per square meter in December. In particular, the figure for Beijing advanced 3.31 percent year-on-year to RMB24,518 per square meter, while in Shanghai it increased by 0.31 percent to RMB27,034 per square meter.

Since the first half of 2010, China has sought to control residential property prices through measures such as restricting second and third home purchases, requiring higher minimum down payments, and levying annual taxes on multiple and non-locally-owned homes in some cities.

However, the strong demand for homes and buyer’s anticipation of further price increases in 2013 brought housing transactions back to a high level in December. In a separate report forwarded by Shanghai Uwin Real Estate Information Services, new apartment transactions, excluding subsidized affordable housing, exceeded 1.2 million square meters in Shanghai in December, the highest monthly volume in two years.

In 2013, the country’s property sector is expected to stabilize and recover if the current policies remain unchanged and the economy continues to stabilize, but a huge rebound across the nation is rather unlikely as the destocking of new projects that have begun construction in the past two years is far from over, according to the CIA.

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