BEIJING (Reuters) – China's housing market rebounded slightly in December as moderate declines in the larger metropolises stabilized and smaller cities gained momentum, but price growth slowed to a decline. half in 2017, when the government stopped speculation.
Prices for new homes in December rose 5.3 percent from the previous year, up from the 5.1 percent increase in November, but quite a 12.4 percent increase in 2016, when The government worked to achieve a soft landing for the growing real estate market.
Average prices of new homes in China's 70 major cities rose 0.4 percent in December from the previous month, reaching a modest five-month high after growth stabilized for two consecutive months, according to data from the National Bureau of Statistics (BNE). .
Most of the 70 cities surveyed by the NBS still reported a monthly increase in prices for new homes. Fifty-seven cities reported higher prices in December, compared to 50.
Slightly higher prices outside major cities could be due to an increase in supply, as developers pursued sales targets towards the end of the year. However, analysts said: "A change in the monetary and financial policies of the government has exerted greater liquidity pressure on some developers, it is also becoming clearer to them that the adjustment measures will be maintained for longer than expected "said Joe Zhou, head of research at JLL China, a real estate services firm.
Property sales per floor accelerated to a six-month high in December, with growth increasing to 6.1 percent from the previous year, according to Reuters, according to a separate official statement from the NBS on Thursday. .
Total sales grew 7.7 percent in the full year of 2017, falling sharply from the 22.5 percent increase in 2016.
China's housing market has exploded in the last two years, which has led more than 100 cities to impose measures to reduce speculative purchases, with Chinese President Xi Jinping reiterating that "houses are built to be inhabited, not for speculation."
A softened but still tough real estate market, backed by constant prices, would please politicians.
They want to maintain the market, which continues to be a vital source of growth for the economy, stable while conducting campaigns to reduce debt and financial risk throughout the country.
Monthly price hikes peaked in September 2016 with 2.1 percent nationwide, but have since slowly softened due to fear of losing scared potential buyers.
As megacities such as Beijing and Shanghai imposed increasingly stringent measures, speculators moved to smaller centers where the authorities offered cheap credit and imposed few restrictions in the hope of eliminating an excess of unsold homes.
Property prices in China's tier 2 cities, mostly substantial provincial capitals, posted the strongest growth in December. They rose 0.6 percent versus a 0.5 percent increase in November, the NBS said. Level 3 cities rose 0.5 percent versus a 0.4 percent increase in November.
Given that official adjustment measures are expected to remain in force, market observers do not foresee significant price fluctuations in the next year.
The market in general is also cushioned by the drop in inventory, which fell 15.3 percent in 2017, according to the NBS.
"We expect an opposite trend in the year before last year: the smaller cities of level 3 and 4 will cool down quickly and more housing offer will go to larger cities where demand will be updated," said Zhou of JLL.
China's housing minister said in December that authorities would facilitate the purchase of property by first-time homebuyers and those who would like to improve their living conditions in 2018, noting that policies would continue to take into account what Beijing considers a demand "rigid" and not speculative.
However, a slowdown in sales has begun to drag real estate investment towards the end of the year. Real estate investment growth slowed to 2.4 percent in December, the lowest since July 2016, according to Reuters calculations.
Still increased 7 percent in 2017, marking the best annual growth since 2014, giving the economy a big boost in the last year.
The second largest economy in the world grew 6.9 percent annually in 2017, exceeding the government's target and accelerating from the 2016 growth of 6.7 percent.
($ 1 = 6.6088 Chinese yuan)
Edition of Eric Meijer and Jacqueline Wong