Reduced decrease in 100 big cities a sign of market recovery: analysts
Housing prices in 100 of China's major cities dropped by 0.01 percent month-on-month in April, 0.14 percentage points lower than that in March, data showed Friday, a sign that the housing market is warming up.
The average price of a new home in the 100 cities was 10,522 yuan ($1,695) per square meter in April, data from property research organization China Index Academy (CIA) showed.
For the 10 biggest cities such as Beijing, Shanghai and Shenzhen, new home prices increased 0.12 percent month-on-month to 18,961 yuan per square meter in the month, CIA data showed.
Shenzhen recorded the highest monthly growth rate of 1.09 percent among the 10 biggest cities in April, according to the CIA.
Home transactions have been picking up after the central government loosened the housing down-payment policy on March 30, Li Zhanjun, analyst from Shanghai-based housing market research firm E-house China, told the Global Times on Sunday.
On March 30, the People's Bank of China (PBC), the country's central bank, together with the housing and banking authorities, announced a relaxation on loan requirements.
For home buyers with an outstanding mortgage who are applying for a mortgage for a second home, the minimum down payment was cut to 40 percent, from the previous level of 60 to 70 percent.
Meanwhile, the minimum down-payment rate for first-home buyers who use the public housing funds has been cut to 20 percent from 30 percent.
Zhang Dawei, analyst from Beijing-based Centaline Property Research Center, said that the housing market is recovering more quickly in first-tier cities like Shenzhen and Beijing, where more people plan to buy a second home and could benefit from the lowered second-home mortgage rate.
Though China's second and third-tier cities are still suffering from oversupply in the housing sector, analysts noted that smaller cities would also see local housing market recovery after the policy boost.
"Local governments will launch more policies to support the housing market as a way to boost the economy," Li noted.
The Bureau of Housing and Urban-Rural Development of Foshan, South China's Guangdong Province, decided to stop reviews of home buyers' qualifications starting on Friday, according to Guangzhou-based newspaper Nanfang Daily's report Thursday, making Foshan the first city in Guangdong to lift the home purchase restrictions, the report said.
Also, the central bank announced to lower the reserve requirement ratio (RRR) by 1 percentage point on April 19, the second time it has cut the RRR this year. The move was also seen as a positive step in helping real estate companies obtain financing, according to the CIA's report.
The PBC has also cut the interest rate once this year.
Zhang said the home prices will continue to rebound in the next few months under these supportive policies.
