Property Market Reports a Slower Recovery as New Home Prices is Seen in October
The real estate sector in China is reporting a much slower recovery in October as new home prices in declining number of cities has shown a month on month increase. Out of 70 large and medium sized that was surveyed in October new home prices has increased month on month, while 33 reported a month on month price decline that is higher compared to 21 reported number last September.
A yearly basis shows that China’s housing market continues to warm up in October as 16 cities posted new home prices has increased. Prices for new homes surged 40 percent year on year in Shenzhen the highest increase was last month among the major cities. Prices for existing homes remains weak in October, as 23 cities have reported a month on month decline that is up compared to 18 in September. A total of 38 cities got price increase compared to 39 in September. Home prices in top tier cities wherein demand is high saw a strong growth, second tier cities saw mixed performances as the continue to drop in third tier cities.
In 2014 the housing market took a downturn due to weak demand and a glut in the supply, and cooling has continued until 2015 as both sales and prices fell and investment slowed. To fight the weakness in the housing market and to create a broader economic slowdown, the central bank slashed the benchmark interest rates at least five times since November and lowered the reserve requirement ratio three times since February. China also eased down the payment requirements for second home purchase while some local governments rolled back their restrictions on home purchases. Due to supportive measures, the housing sector saw a recovery last summer and in autumn as home prices improved.