Home prices rally 7th straight month

HOME prices in China extended their rally for a seventh straight month in December, with 57 of the 100 major cities monitored seeing higher prices, according to the latest industry report.

The average price of new residential properties across the 100 cities edged up 0.23 percent from that of a month earlier to 9,715 yuan (US$1,542) per square meter, according to the China Index Academy's report released yesterday. That compared with an increase of 0.26 percent in November.

Twenty-six cities registered a gain of more than 1 percent, compared with 17 cities in November. Harbin in the northeast led the gainers with a 3.68 percent rise. Forty-three cities, meanwhile, reported price drops, with 21 seeing a fall of more than 1 percent, compared with 10 in November.

"Strong sentiment among end-users fueled a continuous rally in price while robust demand for mid- to low-end houses led to a decelerating pace in average price growth," said Sky Xue, an analyst with China Real Estate Information Corp.

The average price for a new home in China's 10 largest cities advanced 0.45 percent from November to 16,157 yuan per square meter. That compared with a gain of 0.39 percent a month earlier. Year on year, it rose 1.06 percent. It also accelerated from a 0.15 percent increase in November.

Transactions of new apartments, excluding subsidized affordable housing, exceeded 1.2 million square meters in Shanghai in December, the highest monthly volume in two years, Shanghai Uwin Real Estate Information Services Co said in a separate report. That represented a rise of 23 percent from November and a 109 percent surge year on year.

The new homes were sold for an average 21,943 yuan per square meter across the city, an increase from November of 0.77 percent and a decrease from December 2011 of 1.06 percent, Uwin data showed.

"Though the monthly volume hit a 24-month high, the minor growth in average price indicated that first-time buyers with limited budgets continued to be the mainstream consumers," said Huang Zhijian, chief analyst at Uwin. "I don't expect any new tightening policies to be rolled out anytime soon despite the notable rebound in sales since all rein-in measures were aimed to curb speculation."

Last year, Shanghai saw new home sales exceed 9.38 million square meters, annual surge of 28.9 percent. They cost an average 22,461 yuan per square meter, up 2 percent from 2011.

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