Bloomberg News
New home prices in China's four major cities rose the most since January 2011, raising concerns of a bubble as homebuyers were emboldened by a lack of new nationwide property curbs.
New home prices in October jumped 21 percent from a year earlier in the southern city of Guangzhou and 20 percent in nearby Shenzhen, 18 percent in Shanghai and 16 percent in Beijing, the National Bureau of Statistics said in a statement today. Prices rose in 69 of the 70 cities tracked by the government.
Shenzhen and Shanghai this month raised minimum down payments for second homes to 70 percent, following a similar move by Beijing in March, as local authorities struggle to contain price gains. Housing sales jumped 33 percent in the first 10 months of this year as Premier Li Keqiang refrained from adding new nationwide restrictions that would hurt economic growth.
'The flurry of new measures from the cities at least send a message to the market that home-price gains have exceeded the government's bottom line,' China Real Estate Information Corp. said in a report dated Nov. 14, before the numbers were released. 'That will, to some extent, affect developers' mentality at pricing, and slow price increases towards the end of the year.'
Former Premier Wen Jiabao in March stepped up a three-year campaign to contain price gains, ordering cities with excessive increases to raise down payments. Shenzhen raised the deposit level from 60 percent on Nov. 1, one week before Shanghai announced the same move. Guangzhou, now the only of the four so-called first-tier cities that hasn't done so, is likely to follow suit, according to Zheshang Securities Co.
To contact Bloomberg News staff for this story: Zhang Dingmin in Beijing at dzhang14@bloomberg.net
To contact the editor responsible for this story: Andreea Papuc at apapuc1@bloomberg.net
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