Home supply in small and medium-sized cities stable

Small and medium-sized cities in China have stable housing stocks to prevent prices from rising aggressively, according to a report by Standard Chartered.

The report shows that inventories in second-tier cities, usually in well-developed provinces, remain "elevated", good for 15 to 17 months' of sales. Upward pressure on prices will also be limited in the next one or two years, according to the report.

In second-tier cities, including Xiamen, Xi'an, Changsha and Fuzhou, inventories are also sufficient. After peaking in the second half of 2011 and the first half of 2012, stocks in these cities have gradually fallen to about five to six months’ of sales in the second quarter of 2013.

The research also covers floor space of apartments authorized for sale or pre-sale in 40 cities, including apartments under construction and completed.

The average floor space of homes available for sale in third-tier cities fell to 3.39 million square meters as of June 2013 from 3.53 million square meters in 2012. Monthly floor space available for sale in cities smaller than third-tier ones has remained basically flat, at 2.6 million square meters, in the past 18 months.

Land sales in 300 small and medium-sized cities are recovering, rising by 50 percent year-on-year from May to July 2013, after bottoming out in early 2012.