New home prices rise in just 55 of 70 Chinese cities, the lowest in 18 months, amid Beijing's efforts to cool the market

By Pearl Liu / | September 18, 2019 2:47 AM SGT
The Chinese government's efforts to take the heat out of the property market appear to be paying dividends, with new data pointing to a slowdown in price gains as a growing number of developers slashed their prices.
The price of new homes increased in 55 of 70 cities tracked by the National Bureau of Statistics in August, the lowest number in 18 months. Only 44 cities saw new-home prices increase in February last year.
The average cost of a new home rose by 0.58 per cent in August, the smallest increment in six months, according to calculations based on the data released on Tuesday. It was slightly lower than July's growth of 0.59 per cent, while prices grew 0.66 per cent in June.
"Price increases are likely to be further narrowed as we've seen developers starting to offer discounts to woo buyers," said Yan Yuejin, a research director with Shanghai-based property services firm E-House China R&D Institute.
"And more cooling measures will kick in, and in some cities prices will go down."
Ten cities, including some major ones like Nanjing and Chongqing, have seen their new home prices reverse course from their June levels.
China Evergrande, the country's third-largest developer by sales, launched a two-month campaign on August 20 offering discounts of up to 22 per cent on 532 projects across the nation.
Other developers are providing discounts on individual projects in different cities. Country Garden, China's largest developer by sales, cut the prices of homes in its The Clouds project in Guangzhou by about 10 per cent.
The fact buyers are now expecting further price cuts may actually deter them from taking the plunge right now, and will put pressure on home sales in the coming months, analysts said.
China is likely to see close to zero growth in new home sales, said Tommy Wu, senior economist at Oxford Economics.
The data for August home prices still marked a 52nd straight month of gains, as the bull-run in the housing market stretches well...