Feb. 1 (Bloomberg) -- China’s new home prices rose 1 percent in January, the biggest gain in two years, as developers turned optimistic because the government did not impose additional measures to curb the property market last month.
Prices climbed for an eighth month in January to 9,812 yuan ($1,577) per square meter (10.76 square feet) from December, SouFun Holdings Ltd., the country’s biggest real estate website owner, said in an e-mailed statement today, based on its survey of 100 cities. The increase was the biggest since January 2011.
Developers have supplied more high-end properties to the market since the Ministry of Housing and Urban-Rural Development said in December that it would support demand from residents seeking bigger homes this year, SouFun said. China may delay expansion of property tax trials because the timing is not “mature,” China Securities Journal reported today, citing an unidentified person.
“Most developers expect no new property tightening in the short term,” said Zhao Zhenyi, a Shanghai-based property analyst at Industrial Securities. “They are very optimistic.”
Evergrande Real Estate Group Ltd., the country’s biggest developer by sales volume, last month said it is targeting sales of 100 billion yuan this year, 25 percent higher than the target in 2012.
Home prices rose 1.2 percent last month from a year ago, according to the SouFun statement.
The government has raised down-payment and mortgage requirements in its almost three-year effort to curb the property market. It also imposed a property tax for the first time in Shanghai and Chongqing, increased construction of low-cost social housing and enacted home-purchase restrictions in about 40 cities.
Home prices will continue to soar as the positive momentum spills over from coastal to inland areas, wrote Alan Jin, a Hong Kong-based property analyst at Mizuho Securities Asia Ltd., in an e-mailed reply to questions. He added that worries of more policy tightening will increase if prices rise too fast.
A gauge tracking property shares in Shanghai rose 0.8 percent at the local close, making it the second-best performer among the five industry groups that make up the Shanghai Stock Exchange Composite Index. The benchmark rose 1.4 percent.
The eastern coastal city of Quanzhou had the biggest gain last month, with prices increasing 4 percent, SouFun said. Home prices in Beijing and Shanghai both rose 2.3 percent from December.
China’s property prices “bottomed out” at the end of last year, while developers’ credit profiles have improved on sales growth and better liquidity, Moody’s Investors Service said in a Jan. 29 report. Fourteen out of 15 Chinese developers it tracked met or exceeded the sales target last year.
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