BEIJING: China’s property resale market cooled a notch in April due to intensified government curbs, but chances are slim that prices would fall across the board as housing supply remains short, a top state think-tank said on Monday.
Average prices for existing homes grew 1.75 % in April from a month ago, compared to a 2.66 % increase in March, the National Academy of Economic Strategy (NAES) of the Chinese Academy of Social Sciences (CASS) said in a report.
The think tank, under China’s cabinet, analyses prices recorded through online transactions in 30 major cities.
It said “wild” price gains in March were contained after the government introduced “swift and intensive” tightening measures in many cities.
But it’s extremely unlikely for prices to fall “across the board” in future, the think tank said, adding that some cities with low inventories would continue to see rapid price rises.
In the biggest cities, “housing supply will remain insufficient both in the short- and longer-term. So it’s hard for property prices to fall dramatically just due to housing policy or monetary policy tightening,” it said.
“As long as population inflows to the big cities doesn’t change momentum, residential housing supply will remain insufficient in those cities in the long-term.”
HOUSING EXPERIMENTS
Beijing has become the most expensive city with a median price of 63,647 yuan ($9,231) per square metre in April, or $858 per square feet, followed by Shanghai, Shenzhen and coastal city Xiamen.
The report recommended policymakers keep restrictions in place to further stabilise prices, and utilise the planned Xiongan economic zone to experiment with ways to tackle housing supply issues.
China’s housing ministry said in April that cities with unsold housing inventory equal to less than 12 month of sales should increase land supply for residential development. Cities with inventories equalling sales of less than six months should also quicken the supply pace.
But cities with inventories of more than 36 months of sales should stop supplying land for housing.
Chinese cities under pressure from soaring home prices need to boost land supply appropriately while authorities take measures to fight an inventory overhang in smaller cities, Premier Li Keqiang said in March.
The rate of inventory destocking appears to be quickening in recent months. Inventory floor area in the first four months fell 7.2 percent from a year earlier, compared with a 6.4 percent decline in January-March.
April housing price data from the National Bureau of Statistics is due on Thursday.
Source: Reuters