Tighter China rules see new home price growth at slowest since 2016

Average new home prices were up just 0.4 percent across China’s 70 largest cities in September, having grown 0.6 percent in August, data showed. (AFP)
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Updated 21 October 2020

Tighter China rules see new home price growth at slowest since 2016

  • Average new home prices in 70 major cities across China rose 0.4 percent in September from a month earlier

BEIJING: New home prices in China grew at their slowest pace in over four and a half years as tightening measures in some big cities helped cool the property market despite a broader economic recovery.

New home prices in China also grew at a slightly slower monthly pace in September, official data showed, while the number of cities reporting monthly price increases for new homes fell.

A recovery in China’s property market has provided much-needed support to an economy hard-hit by the coronavirus earlier this year. But policymakers have rolled out new restrictions in recent months on concerns of a potential market bubble.

“The broad tightening of housing policies since July has had an impact on home prices data,” said Zhang Dawei, a Beijing-based analyst with property agency Centaline.

Average new home prices in 70 major cities rose 0.4 percent in September from a month earlier, compared with a 0.6 percent increase in August, according to Reuters calculations based on data released by the National Bureau of Statistics.

On an annual basis, home prices rose 4.6 percent in September, the slowest pace since February 2016, and versus a 4.8 percent expansion in August. More than 20 cities have imposed new rules since July to prevent sharp price rises, while regulators have introduced stringent rules to contain property developers’ debt levels.

In September, many developers moved to cut prices to attract buyers ahead of the eight-day National Day holiday.

“The softening growth is also due to an increase in supply as developers ramped up sales promotion during the traditionally peak season,” Zhang added.

As China’s recovery solidifies, economists say policymakers will be watching home prices closely and will tweak rules as necessary.

Real estate investment in China rose at the fastest pace in nearly one and a half years in September. Household leverage ratio meanwhile soared to a record in June, threatening to hobble private consumption, a key source of growth.

The NBS data on Tuesday also showed the number of cities reporting monthly price increases for new homes fell to 55 out of 70 from 59 in August. Tier-3 cities reported the strongest monthly gains.

China’s home prices are expected to rise 4.8 percent this year, a Reuters survey showed in late September, at a slower pace than last year, as Beijing shifts to deleverage the sector.

Fishing rights top Brexit talks agenda

Updated 30 November 2020

Fishing rights top Brexit talks agenda

  • A no-deal scenario is widely expected to cause economic chaos

LONDON: Last-ditch Brexit trade talks continued in London on Sunday with fishing rights remaining an “outstanding major bone of contention,” according to British Foreign Minister Dominic Raab.

EU chief negotiator Michel Barnier told reporters that “work continues, even on a Sunday,” as he arrived for the second day of talks.

Barnier had arrived in London on Friday following a spell in self-isolation after a member of his team contracted coronavirus and ahead of the resumption of talks with British counterpart David Frost on Saturday.

Both men warned that a deal could not be reached without major concessions from the other party.

There are only five weeks to go until the end of the current transition period, during which trade relations have remained largely unchanged.

The two key sticking points remain post-Brexit access to British fishing waters for European vessels and the EU’s demand for trade penalties if either side diverges from common standards or state aid regulations rules.

Raab told Sky’s Sophy Ridge on Sunday that this could be the final week of “substantive” talks, with time running out to agree and ratify a deal.

“There’s a deal to be done,” he said.

“On fishing there’s a point of principle: As we leave the EU we’re going to be an independent coastal state and we’ve got to be able to control our waters,” he added.

Barnier told envoys last week that London was asking that European access to UK waters be cut by 80 percent, while the EU was willing to accept 15 to 18 percent, according to a Brussels source.

A British official called the demands “risible,” according to the domestic Press Association, adding that the “EU side knows full well that we would never accept this.”

“There seems to be a failure from the Commission to internalize the scale of change needed as we become an independent nation,” said the source.

However, Raab was cautiously optimistic over the “level playing field” issue, saying “it feels like there is progress toward greater respect” for Britain’s position.

A failure to reach an agreement would see Britain and the EU trading on World Trade Organization terms, with tariffs immediately imposed on goods traveling to and from the continent.

As it stands, Britain will leave Europe’s trade and customs area on Dec. 31, with no prospect of an extension.

A no-deal scenario is widely expected to cause economic chaos, with customs checks required at borders.

Concern is particularly acute on the border between EU member Ireland and the British province of Northern Ireland, where the sudden imposition of a hard border threatens the delicate peace secured by 1999’s Good Friday Agreement.

The talks have already dragged on much longer than expected and time is running out for ratification of any deal by the European Parliament by the end of the year.