June property sales growth sees money squeezed towards smaller cities

World
Europe

By CGTN’s Cyrus Ip

Prices for new homes in China saw growth decelerate for the seventh consecutive month in June, but some smaller cities still registered robust increases, said the National Bureau of Statistics on Monday morning.

New home prices in 70 major Chinese cities rose 10.2 percent year-on-year in June, slowing all the way from a peak of 12.6 percent last November. In 70 surveyed cities last month, 60 registered price increases on a monthly basis, and only four of those cities saw growth of less than one percent.

First-tier cities saw growth in new and resold home prices fall 2.6 and 1.9 percent respectively last month. Beijing’s new home prices slid from growth of 13.5 percent in May to 10.7 percent in June. Shanghai is back to single digit growth, and Guangzhou and Shenzhen new house prices also decelerated.

In contrast, some smaller cities such as Luoyang in Henan Province saw home prices jump 2.4 percent in a month, the biggest increase of all the 70 tracked cities. Bengbu in Anhui Province, price increases of around two percent in just one month translated into 17 percent growth from a year earlier.

The photo shows residential houses in Yanjiao in Hebei Province. Yanjiao was once a small town 30 kilometers east of Beijing, but is now home for about 300,000 commuters working in Beijing. Pricey property has in turn made Yanjiao a hot spot for Beijing-based workers to live. /VCG Photo

Home prices remained flat in second-tier cities such as Tianjin, Nanjing and Zhengzhou.

Regulators have intensified a crackdown on property speculation since late March, taking tougher measures in bigger cities. But that has in turn spurred on buying in smaller cities, a trend which the government is already aware of.

“I think we have to be aware of those third-tier cities and the areas surrounding the first-tier ones. The purchase restrictions in the big cities will spread the buying power to other smaller cities, if some of the buyers can't buy homes in the big cities, they will probably turn to those smaller ones,” said Liu Weimin, an analyst with the Development Research Center of the State Council.

Data released on Monday showed faster growth in sales of both newly built and second-hand homes, along with strengthening new residential construction. Some real estate experts believe property sales this year will beat last year's record high.