China

China’s Housing Price Decreases 0.59% in August

This article was originally published on September 1, 2014 at 11:36 pm

Summary:

  • The average house price for 100 cities decreased 0.59% in August compared with July to RMB 10,771 per square meter, as reported by 21cbh.com.
  • The average house price for the 10 largest cities including Beijing and Shanghai decreased 0.53% to RMB 19,000 per square meter during the same period.

Why It Matters:

  • 21cbh says that August is the fourth consecutive month in which housing prices have decreased. However, many cities including Beijing and Nanjing recorded increasing transactions volumes. According to Bjnews.com the housing price in Beijing decreased 8% but transaction volume increased 54.8%.
  • September and October are the two most important months for real estate developers to sell houses. 21cbh expects house prices to be stable with with an increase in transaction volumes over the next two months. Several of China’s large real estate developers including China Vanke (CH: 000002) have just published earnings reports which show slow growth in the market. The performance of the housing market in the next two months is critical for real estate developers’ 2014 earnings.
  • In order to support local housing markets, 38 out of 47 local governments have eased real estate purchasing restrictions. These were issued during the housing boom to create a price ceiling by prohibiting non-local residents from making purchases.