China’s residential property prices declined for a fourth month in December following the government’s announcement that it intends to maintain its property cooling measures, according to SouFun Holdings Ltd.
SouFun, China’s largest real estate website owner, revealed that home prices fell 0.25 percent last month from November. Out of the 100 tracked cities, 60 witnessed a decline in residential prices, including the country’s 10 largest cities, such as Beijing and Shanghai.
“Home prices extended the downward falling tendency, but didn’t fall aggressively, because many developers have already achieved sales targets. Property is likely to be the last sector that the government will relax policies this year,” said Peter Bai Hongwei, a Beijing-based property analyst at China International Capital Corp.
SouFun noted that average home values across China rose 2.9 percent in December from the same period in 2010 to 8,809 yuan (S$1652.96) per sq m, the slowest year-on-year growth since August.
Chinese Premier Wen Jiabao said business conditions this quarter may be “relatively difficult”, while monetary policy will be fine tuned as required.
In the following months, price cuts will “steepen and spread” from major to smaller cities across China as developers “strive to maintain a decent sell-through rate”, said Derek Kwong, an analyst at HSBC Securities Asia Ltd.
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