BEIJING, Oct 18:
China’s home prices were broadly flat on the month in September, calculations based on official data showed on Thursday, halting two months of upticks in a sign that government efforts to maintain strict controls on speculative activity are working.
Prices month on month gained just 0.01 percent in September, following gains of 0.1 percent month-on-month in each both August and July. Year on year, home prices across China fell 1.3 percent, according to Reuters calculations of official data.
Real estate investment, which affects more than 40 other sectors from cement and steel to furniture, rose 15.4 percent in the first nine months of 2012 from a year earlier, slowing from an annual increase of 15.6 percent in the period of January-August, the National Bureau of Statistics said on Thursday.
Despite the wider economy’s slowdown, the government has waged a campaign for two years to cool red-hot property prices which has put an extra brake on economic activity and which analysts say has offset the impact of pro-growth policy easing.
‘Since there is no let-up in property controls, home prices show signs of stabilising in September,’ said Hui Jianqiang, research head at E-House China, a real estate information provider.
The statistics bureau’s month-on-month data also showed Beijing home prices rose 0.1 percent while Shanghai was flat, although the two key cities saw year-on-year price falls of 0.5 percent and 1.6 percent, respectively.
Compared to a year ago, however, nationwide home prices are still falling. The 1.3 percent fall in September was the seventh such decline, according to Reuters calculations based on the official data.
Reuters started its weighted China home price index in January 2011 when the NBS stopped providing nationwide data, and only gave home price changes in each of the 70 major cities.
New home prices rose in 31 cities of the 70 cities month-on-month in September, down from 35 in August, the NBS added.
Premier Wen Jiabao said on Wednesday that China will keep restrictions on the property market, dispelling any suggestion that the government would allow a rebound in the housing market by relaxing purchase restrictions.
China is on course for its weakest full year of growth since 1999, and analysts say relaxing property controls would be the surest way to put momentum back in the economy.
China’s deputy central bank deputy governor, Yi Gang, said last week that signs of resurgence in property prices posed a dilemma for policymakers and the government was in a delicate situation to maintain stability.
Under the banner of policy fine-tuning, China’s central bank cut interest rates twice in June and July and lowered banks’ reserve requirement ratio (RRR) three times since late 2011, freeing an estimated 1.2 trillion yuan for boosting loans.
But it has refrained from cutting interest rates or RRR since July. Instead, it has opted to inject short-term cash via open market operations into money markets to ease credit strains.
Rocketing property prices were a major consequence of China’s last economic stimulus effort, the 4 trillion yuan ($635 billion) package launched in 2008 at the depths of the global financial crisis.
(AGENCIES)
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