More Chinese cities see rising home prices

More Chinese cities saw home prices rise month on month in November amid the government’s strict measures to cool the sector, the National Bureau of Statistics (NBS) said on Tuesday.

In November, 53 out of a statistical pool of 70 major cities recorded higher new home prices than a month earlier, NBS statistics showed. This was up from 35 in October.

New home prices in 10 cities declined last month, down from 17 in October, while those in the other seven cities were unchanged.

On a year-on-year basis, 25 cities saw rises in new home prices last month, up from 12 in October. Prices in 41 cities dropped year on year, down from 56 in October.

Runaway real estate prices have been a significant source of public complaint in recent years, forcing the government to implement a string of policies like bans on third-home purchases and property tax trials to keep prices down since early 2010.

However, the property market has shown signs of warming up in recent months, after the central bank earlier this year twice cut interest rates and banks’ reserve requirement ratio to buoy the economy.

China’s annual economic growth slipped to 7.4 percent in the third quarter this year, slowing for seven quarters in a row.

Housing transactions have gradually picked up since early 2012, NBS data showed.

Total home sales surged 9.5 percent year on year to 5.35 trillion yuan (850.83 billion U.S. dollars) in the first 11 months, accelerating from a rise of 5.6 percent seen in the January-October period, according the NBS.

Wang Tao, chief economist with UBS Securities, said the property sector has rebounded steadily since early this year, partly because the government did not take further measures to curb the market in 2012.

“The property industry is undoubtedly a crucial sector for the country’s economy, and the sector’s rebound has played a key role in bolstering China’s recent economic recovery,” Wang said.

The government will continue its property market controls next year, according to a statement released after the central economic work conference, held last weekend to set the tone for economic policymaking next year.

The meeting also attached great significance to urbanization, which has been considered a main driver for domestic demand and will be actively and steadily pushed forward in 2013, said the statement.

The country’s urban population, which outgrew that of rural areas for the first time at the end of last year, is expected to account for 70 percent of the total population by 2030, according to a World Bank forecast.

However, urbanization will put great pressure on the real estate market and make the country’s property curbs more difficult.

If housing sales continue the momentum of growth seen this year, housing prices may rise in more regions and at faster rates than before, Wang said.

“But as the economic recovery is still at an initial stage, the government is likely to remain cautious about property control in the short term,” the economist added.

The government said at the economic work conference that it will maintain a proactive fiscal policy and prudent monetary policy in 2013 as it expects the global economy to maintain slow growth.

Xinhua