File photo taken on Sept. 8, 2011 shows a traffic sign in front of residential buildings in Qingdao,
east China's Shandong Province. (Xinhua/Huang Jiexian)
"The rapid rise in property prices has been markedly contained, as the prices in some cities have begun to drop," the National Bureau of Statistics (NBS) spokesman Sheng Laiyun said in a press conference on October 18.
In order to keep housing prices down, the government adopted a series of tightening measures earlier this year, such as instructing local governments to set new home price control targets, raising minimum down payments for second-home purchases, limiting purchases of new homes and introducing property taxes in the cities of Shanghai and Chongqing.
There are clearer signs of cooling in China's property sector, as a result of the central government's measures to deflate the property bubble.
More cities see slower property price increases
More cities reported a slowdown in year-on-year increases in property prices in September as a result of government's tightening efforts to cool the market, the National Bureau of Statistics (NBS) said.
In September, 59 cities out of the statistical pool of 70 major cities saw new home prices increase more slowly from a year earlier, compared with 40 cities in August, the NBS said in a report on its website.
Property prices in first-tier cities, including Beijing, Shanghai, Shenzhen and Guangzhou all stayed flat month-on-month for the third straight month, according to the report.
Chongqing, one of the two cities to impose property taxes this year - the other being Shanghai - posted the steepest decline as prices dropped 0.4 percent from August. Changsha, Kunming, Yinchuan and Luoyang had the largest gain, 0.3 percent, according to the NBS.
Property prices are gradually heading downwards amid cumulative government control efforts.
As one market-cooling measure, the government has restricted residents in 43 major cities from buying second or third homes, resulting in a decline in property transaction volume in many of these cities.
Raised mortgage rates for first-time buyers to further lower property prices
Government control measures will yield far better results in first-tier cities than in second- and third-tier cities. Meanwhile, tightening property loans by banks in second- and third-tier cities has spread to big cities, which will further reduce buying demands.
China Construction Bank Corp, China's biggest mortgage lender by assets, raised rates for first homes in Beijing to 1.05 times the central bank's benchmark lending rate, Xinhua News Agency reported on Oct 13. It used to offer first-home buyers 30 percent off the benchmark rate. China Everbright Co raised its rate in Shanghai to the same level, according to Economic Information Daily.
The Legal Evening News reported that banks in 14 cities, including Guangzhou, Shenzhen and Shanghai, have raised mortgage rates for first-time buyers by 5 percent to 30 percent. In Changchun, Jilin province, some banks raised their rate by up to 50 percent, according to the newspaper.
Recent interest rate hikes by some commercial banks on mortgages for first homes will definitely lower demand among home buyers and therefore raise pressure on developers for larger price cuts, analysts said.
The higher mortgage rates will reduce already low trading volume and force developers to further cut prices to keep their businesses running.
Meanwhile, cash-strapped property developers are facing increasing financing difficulties and piling inventories pressures.
Current gov’t control should continue
China's housing market started correcting, but the central government wouldn't want to stop tightening just yet.
Results of a recent stress test show that commercial lenders in China can take as much as a 40 percent decline in property prices, and the general risk in property loans is controllable, said Liu Mingkang, chairman of the China Banking Regulatory Commission (CBRC).
The MOF said the slower growth in fiscal revenue followed a slight downturn in the economy and ongoing monetary tightening policies designed to cool down the property market.
"The rapid rise in property prices has been markedly contained, but we'll still need to consolidate the result and closely monitor the market," NBS spokesman Sheng Laiyun said in a news conference in Beijing.
"We will not relinquish control as the property sector serves as an pillar industry to the nation's economic development, and will continue to monitor the sector's changes to further consolidate the results of macro control," Sheng noted.
Related:
Property loan risks controllable: CBRC chief
BEIJING, Oct. 20 (Xinhuanet) -- Results of a recent stress test show that commercial lenders in China can take as much as a 40 percent decline in property prices, and the general risk in property loans is controllable, said the top banking regulator Liu Mingkang on Wednesday.
By the end of August, outstanding property loans among Chinese commercial lenders stood at 10.4 trillion yuan ($1.63 trillion), 19.8 percent of the total of outstanding loans. "The proportion is far less than that of many European countries and America," said Liu, the chairman of the China Banking Regulatory Commission (CBRC). Full story
Beijing covers more with public rental housing program
BEIJING, Oct. 19 (Xinhua) -- The municipal government of Beijing unveiled a regulation Wednesday allowing more people to apply for public rental housing in the latest effort to provide affordable housing.
According to the regulation effective starting December, low and middle-income earners, new employees, and those who are non-local registered but have worked in the city for a certain number of years are eligible to apply for public rental housing. Full story
Mortgage rates for first-time buyers inch up
BEIJING, Oct 19 (Xinhuanet) -- Some Chinese banks have raised mortgage rates for first-time home buyers, local media reported, a move analysts say will dampen property prices, which one industry surveys says have just posted their first monthly decline in a year.
China Construction Bank Corp, China's biggest mortgage lender by assets, raised rates for first homes in Beijing to 1.05 times the central bank's benchmark lending rate, Xinhua News Agency reported. China Everbright Co raised its rate in Shanghai to the same level, according to Economic Information Daily. Full story
Home buyers angry as project's prices lowered
BEIJING, Oct. 24 (Xinhuanet) -- Angry homeowners of several residential projects in Shanghai flocked to their developers' sales offices over the weekend, seeking refunds or purchase cancellations after big discounts have been offered by developers to trigger sales.
Hundreds of infuriated homeowners gathered at an office building in Lujiazui of the Pudong New Area on Saturday afternoon, demanding a face-to-face talk with China Overseas Property (Group) Co, which has cut home prices at one of its projects in Pudong that averaged 22,000 yuan (US$3,454) per square meter to around 16,000 yuan per square meter during its latest promotion held in collaboration with a major real estate website for group buyers.