Residential prices dropped 0.25 percent last month from November, said SouFun, the nation’s biggest real estate website owner. Prices slid in 60 out of 100 cities tracked by the company, including all of the country’s 10 biggest cities such as Shanghai and Beijing, it said in an e-mailed statement today.
The government said last month at an annual economic planning meeting that it won’t back away from real-estate industry curbs this year that are damping home sales and pulling down prices. The nation’s financial center of Shanghai and some other Chinese cities have also said they will continue to impose the home purchase restrictions this year.
“Home prices extended the downward falling tendency, but didn’t fall aggressively, because many developers have already achieved sales targets,” said Peter Bai Hongwei, a Beijing- based property analyst at China International Capital Corp., the country’s biggest investment bank. “Property is likely to be the last sector that the government will relax policies this year.”
Average home values nationwide climbed 2.9 percent in December from the same month in 2010 to 8,809 yuan a square meter (10.76 square feet), the slowest year-on-year growth since August, SouFun said.
Evergrande, China Vanke
Evergrande Real Estate Group Ltd. (3333), China’s second-biggest developer, said last month sales rose to 79.1 billion yuan ($12.6 billion) in the first 11 months, exceeding the 2011 target by 11 percent. Sales of China Vanke Co. (000002), the biggest by market value, stood above 100 billion yuan for a second year in 2011, according to the company.
China may avoid a hard landing of its property market because of sustained high economic growth potential and a sufficiently solid financial foundation, the state newspaper Peoples’ Daily reported today citing researchers from a government think tank.
“It’s actually very hard to tell whether China’s property market will succeed a soft landing,” said China International’s Bai, who expects home prices to bottom as early as in the third quarter.
The government has said it will continue to increase the supply of social housing. It plans to start the construction of 7 million homes this year, compared with 10 million in 2011. The completion will at least keep pace with last year’s 5 million units, People’s Daily reported today, citing Feng Jun, a housing ministry official.
Price cuts will “steepen and spread” from major to smaller cities in China in the coming months as developers “strive to maintain a decent sell-through rate,” HSBC Securities Asia Ltd. analysts led by Derek Kwong said in a report today.
--Bonnie Cao. Editors: Tomoko Yamazaki, Andreea Papuc
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