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By Yawen Chen and Ryan Woo
BEIJING (Reuters) – New home prices in China have risen at their smallest pace since almost a year in August, due to the slowdown in the economy and existing restrictions on energy efficiency. 39 speculative purchase that weighed on aggregate demand.
Concerned by property bubbles, Chinese regulators have promised to refrain from stimulating the real estate sector by putting in place measures to stimulate the entire economy affected by the Sino-US trade war. and the slowdown in consumer demand.
The average price of new homes in China's 70 largest cities rose 8.8 percent in August, up from 9.7 percent in July and the slowest pace since October 2018, according to Reuters data. National Bureau of Statistics (NBS) released Tuesday.
On a monthly basis, average new home prices rose 0.5% in August, below the 0.6% growth in July and the smallest increase since February. However, it still marks the 52nd consecutive month of gains.
Most of the 70 cities surveyed by the NBS still reported monthly increases in new housing prices, although that number fell to 60 in July.
The real estate sector has been considered one of the few hotspots of the world's second largest economy.
Real estate investment in China grew at its fastest pace in four months in August, according to data released on Monday, as industrial production and investment slowed for extended periods.
Some analysts have however explained that the resumption of investment was probably due to the rush of developers to comply with government requirements before they could start selling, in the face of growing pressure from funding and to concerns about the market outlook, with regulators clearly indicating that control would tighten.
Yang Yewei, a Southwest Securities analyst based in Beijing, said some developers had chosen to cut prices, although the government's tight control over new launches suggests they might not tolerate any price increases. important discounts.
The resilience of the real estate market has provided some protection to the world's second-largest economy, as policymakers attempt to revive the struggling manufacturing sector and restore declining consumer confidence in the context of a growing trade war with states. -United.
But regulators are tightrope, as rising household debt and steadily rising house prices have also heightened fears of a sudden market correction and concerns over the affordability of housing.
The Chinese government announced in July that it would not resort to the housing market to further boost credit in other sectors of the economy. .
"The political impact of this meeting was fully exploited in August," said Xia Dan, an analyst at China's Bank of Communications.
Slower price increases may leave some room for maneuver because they do not stimulate the real estate sector, but Nomura economists expect some tightening measures to be eased toward the end. from 2019, as the weakness of the economy accentuates.
"Any attempt to stabilize growth by stifling credit to the real estate sector could backfire," they said, noting that the sector accounted for about a quarter of China's GDP.
Price trends have been mixed in recent years. Some cities are showing signs of rapid cooling, while others are still at risk from overheating.
In August, lower prices were observed mainly in Level 2 cities, which include most of the major provincial capitals.
Real estate prices rose 0.5% on average on a monthly basis, which slowed compared to the 0.7% gain recorded the previous month, the statistics bureau said in an accompanying statement. the data.
However, Nanning, the capital of the Guangxi Zhuang Autonomous Region in southern China, recorded the best price performance of the month, with prices rising 2.3% on a monthly basis.
The four major Chinese cities – Beijing, Shanghai, Shenzhen and Guangzhou – recorded an average increase of 0.3% over the previous month, unchanged from July.
Of the 70 major cities monitored by the government, price growth in smaller tier 3 cities recorded the largest monthly increase, although their 0.7% increase was also in line with the July pace.
According to a Reuters poll released in August, average prices for residential properties in China are expected to increase 6% in 2019 in 2019 compared to the previous year. The forecast was slightly higher than the 5% forecast in the latest survey in March, but is well below the 9.7% increase in 2018.
(Additional report by Lusha Zhang, edited by Jacqueline Wong)
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