BEIJING (Reuters) – China’s home prices rose at their quickest annual pace on record in November, but the third consecutive monthly decline suggested that government tightening measures are starting to bite and could temper gains next year.
Average new home prices in China’s 70 major cities in November rose 9.9 percent from a year earlier, according to Reuters calculations based on official data published on Wednesday, the fastest pace since records began in 2011.
Despite slower economic growth and government efforts to curb them, house prices in China have continued to surge, in large part due to a strong view that property remains one of the best investment options, raising concerns of a property bubble in the world’s second-largest economy.
“The headline figure is quite alarming, though it’s not really new and there’s been such high growth in the past mainly due to the low base and rapid growth in the beginning of this year,” said Alfred Lau, property analyst at Bank of Communications International in Hong Kong.
“We expect the momentum will moderate going forward. In case property prices surge again, we may see some tightening as well,” he said.
In a sign the trend may moderate in the coming months, the National Bureau of Statistics data showed home prices rose 0.5 percent in November in month-on-month terms, slowing from October’s rise of 0.6 percent and the third straight decline since August’s 0.8 percent monthly gain.
The latest Reuters poll also predicted a slowdown in house price growth, with analysts forecasting a 5.0 percent rise in house prices next year after a 10 percent gain this year.
They cited relatively tight credit control and government measures for the slower pace of growth.
Liu Jianwei, a senior statistician at the bureau, said in a statement accompanying Wednesday’s data that the slower monthly gains were mainly a result of recent measures imposed by some local authorities to cool the market.
Under pressure to rein in the market, many local governments have rolled out measures including raising minimum down payments for second homes and promising more land for building.
Among the cities to adopt such measures are the major, first-tier cities of Beijing, Shanghai and Shenzhen as well as second-tier ones including Nanjing, Xiamen, Nanchang and Shenyang.
The NBS’s data showed new home prices in the capital, Beijing, rose 16.3 percent in November from a year earlier, with Shanghai up 18.2 percent and the southern cities of Guangzhou and Shenzhen up around 21 percent.
All four cities posted the largest gains since the data series began in January 2011.
Reuters started its weighted China home price index in January 2011 when the NBS stopped providing nationwide data, only giving home price changes in each of 70 major cities.
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(Reporting By Xiaoyi Shao and Jonathan Standing; Editing by Shri Navaratnam)
