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Houses see first drop in prices for a year

(Shanghai Daily)

08:31, October 10, 2011

Shanghai--China's home prices fell for the first time in a year last month as a result of slack sales and tightening austerity measures, according to data released by China Index Academy.

Home prices fell an average 0.03 percent from August to 8,877 yuan (US$1,398) per square meter in 100 major cities across the country, the first monthly decline since September 2010, the property research company said.

Prices rose in 54 of 100 cities and fell in 44 cities in September from a month earlier.

On a year-on-year basis, they climbed 6.15 percent, the academy said.

Of the 10 largest cities, including Shanghai, Beijing, Guangzhou, Shenzhen and Chongqing, the average cost of homes stood at 15,786 yuan per square meter last month, little changed from August, the data showed. Compared to the same period a year earlier, housing prices still rose 3.45 percent on average in the 10 cities.

"The first monthly decline in a year actually indicates that central government's continuing rein-in efforts to fight runaway home prices are taking effect and very likely September might be a turning point," said real estate economist Xie Yifeng. "With tightening measures remaining in force, more real estate developers are prone to offer price cuts so as to trigger sales and replenish capital."

During the last three months of this year, home prices around the country would most likely stay stable or decline a little, Xie said.

"No significant price drops should be anticipated as demand from buyers seeking house upgrading will still be robust. Moreover, expectation of high inflation risk through next year continues to dominate the general public."

In Shanghai, for instance, sales of new homes, excluding affordable housing, fell to a six-month low of 570,600 square meters in September, Shanghai Uwin Real Estate Information Services Co said. Average prices, meanwhile, were 22,605 yuan per square meter, up 3.62 percent from August and an increase of 6.5 percent from same time a year earlier, Uwin data showed.

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