House prices see steady rise across nation

Home prices continued to rise at a moderate pace in most Chinese cities in July, data from the National Bureau of Statistics (NBS) showed Sunday, underlining the weaker-than-expected effect of policy curbs amid the country's economic slowdown.

The price of new commercial residential homes, excluding affordable housing, rose month-on-month in 62 of 70 major cities monitored by the NBS in July, down from 63 in June and marking the fourth consecutive month of slight decline in the growth rate, the NBS said in a statement.

"The month-on-month growth pace has slowed as the State Council's five measures to curb the overheated property market have gradually taken effect, but these measures are not strong enough to reverse the trend of a robust year-on-year growth in new home prices," Xie Yifeng, head of the Asia-Pacific Real Estate Association, told the Global Times on Sunday.

In year-on-year terms, the prices of newly built homes in 69 cities rose last month, unchanged from July, with Beijing recording the highest growth rate of 18.3 percent from a year earlier, followed by Guangzhou's 17.4 percent and Shenzhen's 17 percent, the NBS data showed.

"Home prices in China's big- and medium-sized cities continued to rise in July, mainly boosted by rigid demand [from home buyers] and recent rising land prices," Liu Jianwei, a senior statistician with the NBS, said in a statement Sunday.

The average price of residential land in 105 cities monitored by the Ministry of Land and Resources was 4,799 yuan ($785) per square meter in the second quarter of this year, up 2.06 percent from the previous quarter and 6.13 percent year-on-year.

Local governments have been increasingly depending on land sales to pay off their debts, Xie said, as data from the National Audit Office showed that about 53 percent of the local government debts will come due by the end of 2013.

"Home prices will continue to rise in the rest of the year, but at a slower rate, as most purchase demand has been satisfied and housing supplies will increase," Yang Hongxu, a deputy head of Shanghai-based E-house China R&D Institute, told the Global Times Sunday.

"With a slight growth pace and concerns about a weakening economy, the central government is unlikely to roll out further curbs in the property sector," he said.

Chinese policymakers' recent comments have also strengthened Yang's projections. The Political Bureau of the Communist Party of China Central Committee said in a statement published last month that the government will promote stable and healthy development of the property market, and did not mention policy curbs.

Among the 70 cities, only Wenzhou in East China's Zhejiang Province recorded a year-on-year drop in new home prices in July, the NBS data showed.

The sluggish housing market has hurt the city's economy, with a GDP growth rate of 7.4 percent in the first half of this year, lower than the province's growth of 8.3 percent. Local authorities are mulling on loosening the city's home purchase restrictions.

"Such a move will prevent home prices in Wenzhou from a further drop, and help boost the local economy," Zhang Hongwei, research director of Shanghai-based property consultancy Tospur, said in a research note released Thursday.

He noted that the other 45 cities that currently put limits on home purchases, including Beijing and Guangzhou, are unlikely to follow suit, as Wenzhou's purchase restrictions are much stricter than its peers.

"In the long term, however, administrative measures such as home purchase restrictions will be finally replaced by market-oriented approaches," Zhang wrote.