Major cities have released policies on regulating the property market to curb the crazy market since the end of last September. Despite certain results, they failed to curb the wave of housing purchase after the Spring Festival. A new round of regulation represented by the “March 17” policies in Beijing was introduced. The property market “cooled down” significantly.
Based on the statistics of the National Bureau of Statistics (NBS), the prices growth of new commodity houses and second-hand residential houses in tier-1 cities declined for eight straight months. It dropped 2.2 and 1.7 percentage points in May from April. The prices growth of new commodity houses and second-hand residential houses in tier-2 cities declined for six and four straight months, respectively. It dropped 0.8 and 0.5 percentage points in May from April.
Beijing, Shanghai, Guangzhou and Shenzhen raised the interest rates for housing loans in May while Chongqing, Fuzhou, Suzhou and other tier-2 cities will also raise the rate, indicated Guo Yi from Yahao. Due to the rising cost and long transaction cycles, the trading volume has declined, which will also result in stable housing prices.
On the whole, many cities have imposed restrictions on purchasing, loans, prices and selling of properties. Meanwhile, many cities have been introducing more supplementary policies. Take Beijing as an example, Beijing has introduced more than ten ancillary policies after the “March 17” policies, including raising the down payment, reducing the years of loans as well as other policies. The market cooled down significantly based on the current trading volume.
Based on the statistics of a property intermediary organ, 1,246 new commodity houses (excluding government-subsidized houses) were signed contracts for sale from June 1 to June 20, representing a decrease of 32 percent from the same period of May and a decrease of 53.6 percent from the same period of last year. 5,843 second-hand houses were signed contracts for sale, decreasing 18.6 percent from last month.
As a matter of fact, the property market in most cities in China has been cooling down. Based on the research report released by the E-house China R&D Institute, the trading area of new commodity houses in 50 cities from June 1 to 15 decreased 12 percent from the same period of May and 23 percent from the same period of last year. It is noteworthy that the trading volume in tiers-1, -2 and -3 cities in the first ten days of June decreased on the monthly and yearly basis.
The property market in 50 cities in the first ten days of June decreased amid stability due to previous regulatory policies, indicated Lai Qin, a researcher at the E-house China R&D Institute. The market will maintain the current trend. It is expected that the trading volume in June will decrease amid stability.
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