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Growth of home prices slows in Nov

2013-12-03 13:26 China Daily Web Editor: qindexing
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China's home prices rose further in November, but the growth rate is slowing down as more local governments are rolling out tightening measures.

Average home prices in 100 major cities monitored by the China Index Academy rose 0.68 percent month-on-month to 10,758 yuan ($1,707) per square meter, the 18th consecutive increase since June 2012.

The growth rate, however, was down 0.56 percentage point and hit the lowest level this year, the academy said.

On an annual basis, home prices in the 100 cities rose 10.99 percent last month.

Home prices in major cities such as Beijing and Shanghai remained robust, however, with the average price standing at 18,748 yuan per sq m, up 1.16 percent compared with October and up 16.56 percent from the same period last year.

The slowing growth pace, experts said, is partly due to additional tightening measures from local governments.

While first-tier cities continued to implement measures to curb price growth, the government of Wuhan, a city in central China, announced in November new moves to limit home purchases, making it the first second-tier city to release such measures in recent months.

Subsequently, other cities, such as Hangzhou, Nanjing, Changsha, Shenyang and Nanchang, also announced measures to control price growth.

Meanwhile, the number of cities seeing price gains of more than 10 percent year-on-year increased to 21 last month from 14 in September, a record high so far this year.

"Local governments are expected to roll out additional tightening measures to temper property sales and price growth in the next 12 months," said Franco Leung, an assistant vice-president and analyst at Moody's Investors Service.

The continuous increase in home prices and the additional measures are pushing more Chinese investors to seek overseas opportunities.

Louis Bai, CEO of the Beijing office of Barratt Homes - one of the largest property developers in the United Kingdom - said that members of China's emerging middle class, not millionaires, have been the major buyers of the company's projects in London.

"Most of our individual buyers' family annual incomes hover around 500,000 yuan. Around 60 percent of them are pure financial investors while 40 percent are thinking about immigration and their children's education," said Bai.

Diversifying their investment portfolios, Bai said, is one of their major motivations to buy overseas properties. Barratt Homes plans to sell 200 units to Chinese buyers in the first half of 2014.

According to Bai, Chinese companies will also have to fine-tune their strategies to deal with more uncertainty in the market.

For instance, PKU Resources Group, a property developer partly owned by the Founder Group, is working on a platform to integrate educational, healthcare, financial and shopping services for its residents.

Yu Li, president of PKU Resources, said that customers not only want an apartment but also better services, and that the company will make a concerted effort to integrate the resources of Peking University and of the Founder Group to better serve its clients.

Meanwhile, Franshion Properties (China) Ltd, a subsidiary of Sinochem Group, made "green" buildings its key strategy.

The company has just signed a deal with Beijing Green Carbon Energy-conservation Technology Services Co Ltd to sell the latter 1,000 metric tons of carbon emission quotas each year.

The move marked the first carbon trading deal in China's construction sector, and the two companies will develop more cooperation projects in the environmental sector.

Franshion's carbon emission quota mainly comes from the company's energy-saving building renovation projects.

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