China’s property prices down in most cities

The property prices in China fell in December in nearly three out of four cities from November, according to figures released Wednesday by the government, which introduced the measures to curb speculation in the sector.

Of 70 cities covered by a monthly survey, 52 were seen apartment prices fall last month, according to a statement from the National Bureau of Statistics. In November, the number of cities where real estate had declined was 49.

In December, prices rose only in two cities, and were stable in 16 others.

While the government has limited the credit for the purchase of apartments and some municipalities have restricted the number of dwellings that each family may acquire, the real estate sector experienced a slowdown of investment and sales growth last year.

Investment in the sector grew by 27.9% in 2011 to 6,170 billion yuan, against 33.2% increase in 2010, according to figures released Tuesday.

Developers have been affected by restrictions on the purchase as well as increases in interest rates and the limitations imposed on the volume of loans granted by banks in the policy framework set up by the government to fight inflation.

For their part, home sales – excluding subsidized housing – increased 12.1% to 5.91 billion yuan. In 2010, sales increased by 18.9%.

While the government believes it has successfully curbed speculation and soaring prices in the sector, restrictions on the purchase should remain in place for now.

Shanghai Mayor Han Zheng, has announced this week that the country’s economic capital would keep the controls on real estate in place.