Growth in home prices slows

Government to continue current policies, promote affordable housing

Fewer major Chinese cities saw housing prices increase in September compared with the previous month, and the growth rate narrowed, the National Bureau of Statistics said on Thursday.

Among China's 70 major cities, 31 registered month-on-month hikes in September, compared with 36 in August. The average price increase was below 0.4 percent, down from 1.3 percent in August.

Twenty-four cities saw prices drop, compared with 20 in August, according to the bureau. On an annual basis, 55 cities posted an increase in housing prices, while 12 saw lower prices.

China's home prices are expected to continue to pick up in the fourth quarter, but a big jump across the country is unlikely, according to a research note from the China Index Academy.

"First-tier cities, driven by comparatively lower supply, will face more pressure in containing the price hikes," said Huang Yu, vice-president of China Index Academy.

Prices in second- and third-tier cities, however, will remain stable because there is enough supply. And some cities even face downward pressure due to oversupply, Huang added.

Frank Chen, executive director of CBRE Research China, said the volume of home sales will remain at a healthy level, and that prices will grow at a slow pace in the coming months.

"And that is also the scenario that the government would like to see," Chen said.

Premier Wen Jiabao said on Wednesday that the government will stick to its current real estate policies and further promote the construction of affordable housing, as well as land supply for residential housing.

Li Ming, president of Sino-Ocean Land Holding Ltd, said that the property market is unlikely to fluctuate within a year, and that the government's real estate policies are also expected to remain unchanged.

Property sales solid

As the growth in housing prices slowed down, property sales remained strong in the last month.

The home sales of China's leading listed property developers increased in September on a monthly basis, industry data showed.

By Oct 14, a total of 20 large-scale listed real estate firms had released their third-quarter financial reports, the Securities Times reported. Sales in September hit 65.8 billion yuan ($10.43 billion), up 10 percent from the previous month. Sales in the first nine months reached 488.9 billion yuan, up 8.1 percent from the same period last year.

Jones Lang LaSalle, an international real estate consultancy company, said in a report on Thursday that the high-end residential market saw a strong rebound in the third quarter.

The sales volume of high-end apartments in Beijing, Guangzhou and Chengdu, posted increases of 9.9 percent, 37 percent and 19.6 percent, respectively, compared with the previous quarter.

"Our customers mainly purchased our products to improve their living conditions," said Alex Chen, a sales manager with Ocean Palace, a villa project along Beijing's Fifth Ring Road. "Customers are now more willing to buy large-scale quality products due to the policy restricting the number of homes that a family can purchase."

According to Chen, the company plans to increase prices when the next phase of the project opens for sales, but with small margins.

"Since March, most property developers began destocking. And some of them even raised their annual sales targets because of the strong rebound in the market. I wouldn't be surprised at all if sales of the leading property developers reach a record high this year," said Zhang Dawei, head of market research at the real estate brokerage Centaline Group.

However, despite the improved sales scenario, most large-scale property developers are striving to diversify their business portfolios.

Zhu Zhongyi, vice-president of China Real Estate Association, said at an industry forum that property developers, especially brand names, should quicken the pace at which they are adjusting their business strategies amid the market recovery.

Beijing Capital Land, for instance, boosted its investment in its customer service system, aiming to attract more customers by offering additional value-added services.