From Harbin in the far north, to Shenzhen in the deep south,
property markets in China's most prosperous cities are finally cooling
as tough home purchase restrictions begin to bite.
Less than 9,000 existing homes were sold in the last month, down 17.4
percent from May and nearly 30 percent from the same period a year ago,
according to Lianjia, China's biggest real estate broker.
Sales were around 10,800 in May and 16,900 in April, a fall perhaps
triggered by local governments restriction that became widespread in mid
March.
Down payments for second homes in Beijing have been raised to 60
percent, and mortgages with a maturity of 25 years or more suspended.
The market of new houses has also suffered, with sales dipping to the lowest since 2010.
"The market may again experience the 10-percent slump in second-hand
home prices seen in 2014," said Hu Jinghui, vice president of broker
B.A. Consulting & 5i5j Group, predicting further declines since the
third quarter.
Beijing is not the only Chinese metropolis feeling the pinch of tightening rules.
New residential house prices in Shenzhen, a southern metropolis
neighboring Hong Kong, fell for the ninth consecutive month in June. The
decline boosted sales last month as people snapped up bargains.
Of 70 large and medium-sized cities surveyed, prices in May fell or
rose more slowly in 35 of them, up from 31 in April, as they did in nine
of the 15 first- and second-tier cities, the National Bureau of
Statistics (NBS) said in a monthly report.
"Prices of newly built homes in the 15 major cities including
Beijing, Shanghai and Shenzhen continued to stabilize in May on the back
of targeted local government policies," said NBS statistician Liu
Jianwei.
Property sales grew in 2016 by 22.5 percent due to two years of
policy easing and pro-growth policies, including interest rate cuts.
Since October, local governments have raised down payments, increased
mortgage rates and restricted purchases. China's policymakers announced
in December that "houses are for living in, not for speculation."
Although there are signs of stabilizing, analysts believe the market
is still at a "delicate balance" and expect firm controls to remain for
the remainder of the year.
Prices in markets like Beijing will continue to fall in the second
half as policy control remains tough, said Xia Dan of the Bank of
Communications.
Rating agency Fitch said in a research note that first-tier cities will be more resistant to price declines.
China plans a long-term mechanism to moderate the property market
given the sharp ups and downs in recent years. The mechanism, proposed
by policymakers in December, will require a basket of reforms in areas
including taxation, finance and land supply systems.
"It will address entrenched problems in the sector," Chen Zhenggao, minister of housing and urban-rural development, has said.