BEIJING- China’s new home prices grew at their weakest pace in 17 months in December, with broader curbs on the sector continuing to cool the market in a further blow to the sputtering economy.
Average new home prices in China’s 70 major cities rose 6.6 percent in December, slowing from a 7.1 percent gain in the previous month, Reuters calculation based on National Bureau of Statistics (NBS) data on Thursday.
It was the slowest pace since July 2018, and significantly weaker than the 9.7 percent gain seen in December 2018.
But it still marked the 56th straight month of gains, even as China has clamped down on property speculation since 2016 to stop home prices from overheating. With the pace of China’s economic growth slowing, policymakers are keen to avoid wholesale squashing of the property market – a pillar of the broader economy.
On a month-on-month basis, home prices edged up 0.3 percent in December from the previous month, unchanged from the pace in November.
Most of the 70 cities surveyed by the NBS still reported monthly price increases for new homes, though the number was up to 50 from 44 in November, showing some broadening strength in the market.
Beijing has been calling for more targeted city-based policies to foster market stability. Analysts say any sharp drop in home prices would likely not be tolerated by local governments.
Some cities in the past months moved to relax rules by making it easier for graduates to get coveted household registration permits or lowering the requirements for eligible home buyers.
China’s southern province of Guangdong said on Tuesday it will ease the residential permit in all its cities except the powerhouses of Guangzhou and Shenzhen.
Many analysts are forecasting a further slowdown in the property market this year and expect specific city-wide relief measures to ensure demand doesn’t fall off the cliff.
Price trends have been mixed lately, with some cities showing signs of rapid cooling while others are still plagued with overheating risks.
The so-called tier-3 cities outperformed other city-tiers by rising 0.6 percent on a monthly basis, quicker than November’s 0.5 percent gain, the statistics bureau said in a statement accompanying the data.
Yangzhou, a city of 4.6 million in eastern China’s Jiangsu province, was the top price performer in the month, with its price increasing 1.3 percent on a monthly basis.
Meanwhile, price growth in China’s four top-tier cities – Beijing, Shanghai, Shenzhen and Guangzhou – slowed from a 0.6 percent gain in November. They rose 0.2 percent from a month earlier.
Tier-2 cities, which include most of the larger provincial capitals, increased 0.3 percent in December on a monthly basis, slightly higher than a 0.2 percent gain in the previous month. – Reuters