BEIJING (Reuters) - Average home prices in China’s 70 major cities fell 1.5 percent in May from a year earlier, Reuters calculations based on official data published on Monday showed, and the pace of decline picked up in major cities such as Shanghai.
It was the third straight monthly decline on a year-on-year basis since the government imposed strict curbs on property speculation more than two years ago, with the price decline deepening from a fall of 1.2 percent in April.
In month-on-month terms, home prices fell 0.1 percent, the eighth straight decline since the Reuters weighted index was launched in January 2011.
The National Bureau of Statistics said new home prices fell 1.2 percent in Beijing in May from a year earlier and were down 1.6 percent in Shanghai.
Month-on-month, they remained unchanged in Beijing and were down 0.1 percent in Shanghai.
Many Chinese buyers worry about a rebound in property prices as the government loosens monetary policy to spur a slowing economy, although Beijing has retained its administrative curbs on the real estate market, local media reported on Monday.
“It seems home prices and tightening policies have reached their bottom so quite a few home buyers are starting to panic again,” the People’s Daily, the mouthpiece of China’s ruling Communist Party, said in an analytical report. This is reminiscent of 2009 when prices doubled in several months after Beijing rolled out a 4 trillion yuan ($628.43 billion) stimulus package, the newspaper said.
China has relaxed monetary and fiscal policies after a more than two-year long tightening campaign to cool the country’s red-hot property market as the euro zone debt crisis hit global financial markets and braked domestic growth.
The central bank cut interest rates on June 7, the first such move in more than three years, after it lowered banks’ reserve requirement ratio three times since November.
“Although these measures are not aimed at salvaging the property market, they are a shot in the arm for the cash-strapped real estate market,” the People’s Daily added.
Meanwhile, many Chinese cities have relaxed policies, although the central government has maintained its curbs against speculators.
These measures have changed market sentiment and property sales have shown signs of a recovery since March.
The semi-official China Securities Journal reported on Monday that transactions of new and existing homes combined rose 46.5 percent in Beijing in the first half of June as compared with the same period last year, citing data from the local housing bureau website.
The newspaper also cited local consultancy Home Link as saying that 21 of the 76 new property projects that hit the market so far this year saw a rise in transaction prices.
However, high inventories will cap any quick rebound in home prices in the near term, it cited Home Link analyst Chen Xue as saying.
Vanke 000002.SZ, China’s largest developer by sales, said earlier this month it would take about 11 months to sell down unsold stocks in key cities such as Beijing, Shanghai and Shenzhen.
The company’s sales rose 19 percent in May from the previous month to 10.72 billion yuan ($1.68 billion), reversing a decline in April.
($1 = 6.3651 Chinese yuan)
Reporting by Langi Chiang and Kevin Yao; Editing by Jacqueline Wong & Kim Coghill