The latest official data indicates that second home prices in Beijing saw an across the board decline in the month of May, following widespread rate hikes and onerous policy controls.
Figures from the Beijing survey team of China’s National Bureau of Statistics indicate that the Chinese capital’s second home market saw an overall price decline of 0.9% last month.
The price drop was heaviest for smaller dwellings of less than 90 square metres with a decline of 1%, while medium-sized dwellings of 90 to 144 square metres saw a price decline of 0.8% and large-sized dwellings of over 144 square metres fell by 0.6%.
Prices for new dwellings in Beijing posted a mixed performance depending upon scale, with large-sized dwellings falling by 0.2%, yet small and medium-sized dwellings rising by 0.1%.
Speaking to Sina BA Consulting vice-president Hu Jinghui said that speculation in Beijing’s second home market had been effectively contained by the “strictest and tightest market controls in history.”
Government controls and rising loan rates have also left transaction levels hard hit, with data from Centaline Property pointing to a total of 10,801 second home contracts in May for a 27 month low.
Data from Homelink Research point to a 23.9% decline in second home transactions compared to the preceding month, for the lowest figure since 2015.
Chinese media reports that rate hikes in tandem with an increasing reluctance by banks to extend loans to potential homebuyers are playing a key role in second home price gains as well as the decline in transaction volumes.