China's property market cooling in second half of October

Models of residential buildings are seen at a property showroom in Binjiang district of Hangzhou, Zhejiang province, Sept 14, 2016.  [Photo provided to chinadaily.com.cn]

BEIJING - China's property sector has shown signs of cooling after authorities issued a series of measures to contain high prices, an official survey showed Friday.

Seven of 70 large and medium-sized cities surveyed in the second half of October saw new home prices drop month on month, up from two in the first half of the month, according to the National Bureau of Statistics (NBS).

"Property prices stabilized in the second half of October," the NBS said.

In the second half of October, new residential property prices in Shenzhen and Chengdu continued to decline, while prices in Beijing, Tianjin, Shanghai, Xiamen and Zhengzhou reversed their upward trend and started declining, according to the NBS.

Compared with September, the month-on-month price index for both new and used residential property in those cities retreated in October, even though most cities still reported rises.

The NBS attributed the "significant changes" to policies rolled out by local governments to curb prices. In early October, dozens of Chinese cities announced measures, including purchase limits and tightened mortgage restrictions, to prevent prices rising too fast.

Wuhan, a city in central Hubei province, rolled out measures Monday requiring higher downpayments and stronger purchase restrictions, the latest in a growing list of major Chinese cities trying to tame overheated property markets.

According to the rules, first-time buyers with a Wuhan hukou (household registration certificate) must pay a minimum downpayment of 30 percent, up 5 percent from earlier requirements. Downpayments for second home purchases will rise from 50 percent to 70 percent, and who already own two houses in the city will not be allowed to purchase more.

Friday's data showed that month-on-month price growth rates dropped in all 70 cities, with first-tier cities seeing the biggest slowdowns. New residential property prices in first-tier cities rose 0.47 percent from a month earlier. The growth rate was down 2.81 percentage points from September.

"Price changes were different depending on the city, and commercial housing sales slowed down slightly, which means the market has entered a of wait-and-see period," said Xia Dan, a senior researcher with the Bank of Communications, one of China's top five lenders.

Xia estimated that investment in real estate may grow slightly at the end of the year due to the effect of a low base.

"Under the influence of government controls, sales may shrink sharply in the last two months of the year," said Ding Zuyu, co-president of real estate service company E-House China, adding that it might be a good opportunity for buyers.