Prices of New Homes Fell Slightly in January
Average prices of new homes in Chinese cities fell slightly at a faster pace month on month in January, even with the sluggish demand from home buyers and even when officials loosen mortgage rules and ease up on lending. The decline in home prices continued to widen year on year based on data provided by the National Bureau of Statistics.
Prices at first tiered cities have fared better than prices in smaller cities as the mortgage rules loosens and a more accommodating monetary measure was implemented to lure in home buyers into the market. The central bank also cut down on benchmark interest rates and lowered the amount of reserves that banks have to set aside a measure that was designed to encourage banks to lend more. Although uncertainties still bother the property market, a lot of smaller cities have struggled with high inventories which led to property developers to face tighter cash flow and a narrow margin.
January prices slipped0.43 percent month on month compared to the 0.40 percent fall in December. The price fall in January followed four consecutive months of modest monthly improvements. Average prices of new homes decreased by 5.1 percent year on year in January compared to the 4.3 decrease in December.
Not including public housing, the private housing sector home prices fell in 69 of the 70 Chinese cities in January compare to 68 cities on December. Concerns still remain on the health of the property market in some analysts say that the amount will account for one quarter of the country’s gross domestic product.