Monday, May 21, 2012

Home prices drop in China

More than 60 percent of major cities in China saw new home prices drop last month from March, according to latest figures from the National Bureau of Statistics.

Of the 70 cities monitored by the government, 43 reported a decline in home prices for April, lower than the 46 in March. The bureau also revealed that prices increased in three cities but remained unchanged in 24.

The price falls are due to cooling measures aimed at keeping the property market in check. They include the introduction of property taxes in certain cities, increasing the minimum down payment and a ban on buying second homes.

Despite concerns about the measures’ effect on the economy, Beijing has shown no signs of easing its tight policies.

“We must firmly strengthen control of the property market... not allowing the adjustment and control (policy) to be reversed...,” said a senior housing ministry official.

Zhang Xiaohong, Deputy Head of the Ministry’s Market Supervision Department, noted that the objective was to pull prices back to “reasonable” levels.

The cooling measures also affected land sales of local governments, which rely on it as a major source of income. However, analysts see little change in the central government’s policy, noting that “the adjustment of home prices is still in the middle of a long cycle”.

Zhang Zhiwei, Chief China Economist for Nomura Securities, said, “We expect home prices to remain weak in the coming months”.

View the original article here

Source From Property Guru

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