Larger home prices head south: NBS
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Fewer cities across the nation saw property price increases in February, especially larger-sized homes, which analysts said Sunday indicate government efforts to cool the property market may be showing signs of success.
Fifty-six of the 70 cities covered by a National Bureau of Statistic's survey saw prices rise in February, up from the previous month, compared with 60 cities in January, according to the data out Friday.
Among those, 20 cities reported a decline in prices of large-sized homes – defined as those over 144 square meters – in February from the previous month, against 15 cities in January, the bureau's data showed. But eight cities saw a drop in small-sized home prices – defined as those less than 90 square meters – compared with 10 cities in January.
This is the first time the bureau has used a home-size index in gauging price fluctuations across the county.
"The results show that the government's effort to crack down on property speculations has begun to take effect because large-sized apartments are more likely to be bought by speculative investors. Prices of small-sized apartments show no sign of decline suggests there is still rigid demand for small residential housing," Hui Jianqiang, a senior analyst with the E-House R&D Institute, told the Global Times.
The government has implemented a number of measures to contain home prices and vowed to give priority to developing rental housing and planned 103 billion yuan ($15.6 billion) in this year's budget to subsidize those projects, 26.5 billion yuan ($4.03 billion) more than last year.
However, an expected drop in home prices failed to materialize in recent months.
Prices in Beijing rose 0.4 percent in February from January, slower than the 0.8 percent month-on-month increase in January. Shanghai recorded a 0.9 percent increase for the second straight month, the bureau's data showed.
Liu Tao, an agent with 5i5j Real Estate Service in Beijing, reported no decline in home prices in Beijing recently, saying market prices appear stable.
"The only difference is that there is now more room for price negotiations," he said.
Li Xunlei, chief economist with the Guotai Junan Securities expects no drop in home prices in the short term.
"But, with the government's policy to curb home prices, transaction volume will continue to fall, the market will report bigger funding shortages and the motivation to sell homes will rise, sending prices down in the second half," he told the Global Times, adding more incentive measures offered by developers such as discounts will appear.
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