China house prices heat up despite cooling measures
Values of property in China rose in almost all of the major cities in August 2013, according to the National Bureau of Statistics of China. The sales price of new build property increased in 66 out of the 70 cities covered by the official report compared to July 2013. Annually, the growth is even more severe: sales prices increased in 69 cities and declined in just one.
Leading the way is Beijing, where prices of newly constructed commercial residential buildings jumped 119.3 per cent year-on-year. Home prices rose by almost the same amount, with values up 14.9 per cent year-on-year. House prices in Shanghai rose by an even steeper 15.4 per cent.
Existing home sales prices also increased in 68 of 70 cities year-on-year, with the highest increase recorded at 16.4 per cent.
The figures follow concerted efforts from the Chinese authorities to hold back property price growth, as the country fears a potential housing bubble. Sales taxes have been raised to deter speculation on the market and cool demand. Chinese buyers, though, remain hungry for homes: roughly one quarter of investment in China goes into the real estate sector, according to the BBC.
"Now that economic growth has rebounded and looks set to achieve the 7.5% target for 2013, we believe the government's priority may shift toward containing financial risks and property prices,” Zhang Zhiwei, an economist with Japanese bank Nomura, told the news agency.
Officials are expected by Mr. Zhang to start “tightening monetary and property sector policies after the Communist Party meeting in November”.
Other house price news this week:
Indian developers to cut prices by “up to 18pc”?
Indian developers may cut their prices by up to 18 per cent, one expert has speculated.
Sales of Indian property have fallen in recent months, while the market is still reacting to the Reserve Bank of India’s announcements this summer to protect the weakening rupee. The RBI warned banks against lending developers for 80:20 schemes, which allow buyers to pay 20 per cent of a property’s cost upfront while the bank funds the remained.
At the same time, housing inventory across the country is starting to rise, notes Jones Lang Lasalle, particularly in major cities such as Mumbai and Bangalore. Stock is considerably higher than the “comfortable” levels seen eight to 10 months ago. Combined with falling sales, Ashutosh Limaye, Head of Research & REIS for JLL, suggests that developers will no option other than to correct prices.
Writing at Business World, he said: “A marginal correction in the prices of certain projects aimed at the mid-income segment is not entirely out of the question. If it occurs, it would be within a range of 12-18 per cent.”
House prices stay muted in Scotland
House prices have stayed muted in Scotland this summer, according to new figures from ESPC.
The report shows that the number of homes sold in Scotland in the three months to August increased by 35.9 per cent year-on-year, but prices remained steady. 37.2 per cent of homes sold between June and August 2013 achieved their valuation, up from 28.7 per cent year-on-year, while the number of homes on the market also increased 13.5 per cent.
Values, though, increased only in specific areas: prices rose 1.8 per cent annually in Edinburgh to an average of £219,313 and 1.6 per cent in West Lothian to £182, 963. East Lothian and Midlothian, though, both recorded annual drops of 5.4 per cent and 1.9 per cent respectively.
Source: Property Wire