New-home prices increase 1% in January

New-home prices in China rose 1 percent in January, the eighth straight month-on-month increase since June.

The average new-home price in 100 Chinese cities increased to 9,812 yuan ($1,577) per square meter, according to the China Index Academy, a research institute under SouFun Holdings Ltd, the country's biggest real estate website owner.

"The 1 percent rise is alarming because previous month-on-month growths were no more than 0.5 percent," said Yin Zhongli, a researcher with the Institute of Finance and Banking under the Chinese Academy of Social Sciences.

Month-on-month price growth in December was 0.23 percent and in November was 0.26 percent. A total of 64 cities out of 100 monitored saw month-on-month price growth.

Prices in 10 major cities rose to 16,417 yuan per sq m, a 1.61 percent gain over the previous month. Shanghai saw the largest price gain among the 10 cities of 2.3 percent, while Beijing saw a 2.27 percent rise.

Yin said price rises in major cities were due to developers' rapidly diminishing inventory. Since November, Beijing's new-home stocks had been unable to support eight months' worth of sales, he said.

Last year, China's land supply hit a record low as the property-tightening policy entered its third year. The limited supply curbed developers' land reserves, overshadowing their ability to provide new homes.

But recent signs suggest local governments are stepping up land supply as their land revenue declines.

In Beijing, 22 parcels of land were sold last month, raising 24.17 billion yuan ($3.84 billion) for the local government. In December, land revenue was 2.19 billion yuan.

New-home price rises have also warmed up the secondhand market, with Beijing's average secondhand home price rising 2.22 percent to 35,399 yuan per sq m, the highest among the 10 major cities.

A salesman with property brokerage 5i5j told China Daily that secondhand house deals are now "extremely hot", in what is traditionally a low season for sales. Some homeowners have begun to delay their sales plans due to the bullish outlook, he said.

The rising prices have triggered calls for expansion of the property tax policy, which is expected to curb the number of homes investors buy. So far, the pilot policy has been limited to Shanghai and Chongqing.

Citing an unidentified person, the China Securities Journal reported on Friday that China may delay widening property tax trials because the timing is not right.

Ni Pengfei, director of the Urban and Property Research Center under the Chinese Academy of Social Sciences, said: "Further regulation of the housing market, including expansion of property tax, allows for no delay. A tougher message from the government is very important to stabilize market expectation."

zhengyangpeng@chinadaily.com.cn

(China Daily 02/02/2013 page9)