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Home prices rise in 54 of 70 Chinese cities

By Cherry Cao (Shanghai Daily)

15:44, January 18, 2013

BUYING momentum continued to pick up in a growing number of Chinese cities in December as demand remained resilient amid tightening policies, the National Bureau of Statistics said today.

Excluding government-funded affordable housing, prices rose in 54 of the 70 cities tracked by the bureau, compared with 53 in November and 35 in October. Prices were flat in eight cities while the remainder registered a decline.

Guangzhou, capital of Guangdong Province, led with a monthly increase of 1.2 percent, double November's pace. That compared with a maximum gain of 1 percent in November registered in Luzhou, Sichuan Province.

Year on year, new home prices rose in 40 of the 70 cities in December, up 15 from November.

"With renewed concern about property prices, the central government might become less tolerant of local governments' 'fine-tuning measures'," said Sam Xie, director of CBRE Research. "However, in view of high inventory levels and continued imposition of austerity measures, including home purchase restrictions in major cities, we do not expect any significant price increase in 2013."

In Shanghai, new home prices rose 0.7 percent in December after climbing 0.2 percent in November. In Beijing, they gained 1 percent rise, up from 0.8 percent in November. In Shenzhen, they advanced 1.1 percent in December, compared to a 0.6 percent gain the previous month.

The existing home market had similar results with 46 cities seeing price increases in December, compared to 35 in November. The number of cities where prices gained from a year earlier also rose from 18 in November to 25 last month, according to the bureau.

The residential market first saw a rebound in transaction volume in the second quarter of 2012, mainly driven by lower prices and preferential lending rates for first-time buyers. The momentum has extended to the year end and is expected to remain stable for the coming 12 months with restrictive policies still in place, industry analysts said.

Between January and December, the value of new home purchases, excluding affordable housing, jumped 10.9 percent from 2011 to 5.34 trillion yuan (US$847 billion) across the country, according to a separate report released today by the bureau. By sales volume, 984.68 million square meters of new residential properties were sold during the 12-month period, a year-on-year increase of 2 percent.

Investment in residential development jumped 11.4 percent last yer to 4.93 trillion yuan, accounting for 68.8 percent of the country's overall investment in real estate development, the bureau said.

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