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.