Home prices continue rising despite cooling measures

The price of homes in large Chinese cities continued to rise in November, despite fresh cooling measures in more than a dozen cities in recent months.

Compared with November 2012, all but one of 70 major cities monitored by the government reported gains in new home prices last month, the National Bureau of Statistics (NBS) said on Wednesday.

Twenty-six cities posted an annual increase of 10 percent or higher, with only prices in Wenzhou in east China's Zhejiang Province failing to rise.

Shanghai led the race among the 70 cities, with an annual rise of 21.9 percent in November, followed by an increase of 21.1 percent in Beijing, 21 percent in Shenzhen and 20.9 percent in Guangzhou.

New home prices rose month on month in 66 of the 70 cities, up from 65 in October, the NBS said.

However, the bureau played down the risks, with its statistician Liu Jianwei saying the pace of acceleration has eased in year-on-year terms, while the month-on-month increase in home prices also slowed.

Average home prices in these cities climbed 0.6 percent in November from the previous month, slowing from a 0.7-percent rise in October as local governments ramped up supply of affordable housing and strengthened policies to curb purchasing, according to Liu.

Cities including Beijing, Shenzhen, Nanjing and Shanghai announced a series of measures to check soaring home prices. They raised minimum down payments for second-home buyers, tightened scrutiny of non-local buyers and made more land available, intensifying a nationwide campaign running for four years with the aim of cooling the overheated real estate market.

However, home prices in large cities have continued to charge ahead, adding to concerns about a price bubble and social instability as housing becomes increasingly unaffordable for ordinary people.

Responding to such concerns, China's leadership vowed to push forward property tax legislation and give farmers more liberty with their land-use rights, as part of economic and social reforms to ensure sustainable development in the world's second-largest economy.

Zhang Dawei, an analyst with property agent Centaline Property, said the whole picture is that the central government is trying to form a long-term property controlling mechanism, which will stabilize the market if better implemented.

Zhang said excessive credit supplies during the past two years were the main reason driving up housing prices and will continue to fuel the market in 2014 if not properly handled.

He predicted the rising trend would continue but at a slower pace until the second quarter of 2014.

A report issued on Wednesday by the Chinese Academy of Social Sciences, a government think tank, forecast housing prices in the country's major cities would see a gradual decline in the fourth quarter next year.

Although last week's central economic work conference, a key meeting setting the agenda for next year's economic work, did not mention any new measures for curbing the property market, it stressed the need for affordable housing and land supply.

The absence of new property regulation policies at the meeting did not mean current rules for the sector will be relaxed, said Chen Guoqiang, deputy director of the China Real Estate Society.

Rather, it indicates a change of mindset among the new leadership, who would like to make the government responsible for solving the housing problems of low-income groups while leaving the rest to market forces, Chen said.