New data points to a continued slowdown in home price growth across China’s major cities, following the launch of real estate market controls by municipal governments in March of last year.
A new report from the Shanghai E-House Real Estate Research Institute on housing prices in 100 Chinese cities indicates that year-on-year growth narrowed for the tenth consecutive month in May.
In May 2018 the average new commercial residential building transaction price was 12,514 yuan per square meter, for a month-on-month rise of 0.7% and a year-on-year gain of 11.3%.
This compares to the historic peak of 26.9% in YoY growth posted in July of last year, after which a steady decline in growth has ensued.
“This fully exemplifies the effects of the control policies implemented over the past year,” said Yan Yuejin (严跃进), a analyst with Shanghai E-house, to Economic Information Daily.
The report’s data further indicates that average transaction prices for new commercial residential buildings saw a YoY gain of 3.2% in China’s first-tier cities in May, as compared to 14.0% for second-tier cities and 11.8% for third-tier cities.
“The YoY growth in second-tier cities was largest, and is the reason that this category of cities have intensified and ‘patched up’ their control policies,” said Yan.
“In terms of horizontal comparison, the YoY growth rate of first-tier cities hit a peak in September 2016, which coincided with the unveiling of the ‘9.30 New Policy.’
“This category of city subsequently saw its YoY growth curve enter decline. As a result of the cooling of home prices in first-tier cities, by the second half of 2017 second-tier and third and fourth-tier cities began to see a cooling, with a shift from a high to a low YoY growth curve.”
In May the average floor price in first-tier cities was 41,659 yuan per square meter, 13,197 yuan in second-tier cities and 10,350 yuan in third and fourth-tier cities.
May also marked the ninth consecutive month that the average new commercial residential price was in excess of 12,000 yuan.