While home prices in China rose at its fastest pace in November, there were also signs that the government’s effort to cool the market may be starting to bite as monthly gains stood at its slowest this year, according to media reports.
In November, average new home prices in 70 major cities in China surged 9.9 percent from the previous year – the quickest pace since records began in 2011, according to Reuters calculations based on data from National Bureau of Statistics.
However, the data showed that prices rose 0.5 percent month-on-month in November, from October’s 0.6 gain and the third consecutive slowdown since August’s 0.8 percent increase.
“The headline figure is quite alarming, though it’s not really new and there’s been such high growth in the past mainly due to the low base and rapid growth in the beginning of this year,” noted Alfred Lau, property analyst at Bank of Communications International in Hong Kong.
“The government also sees that. So that’s why you see some tightening measures, especially on mortgages. That also explains the slow growth in November. We expect the momentum will moderate going forward,” he added.
Notably, China’s house prices have soared over the past year, due in part to the perception that property is one of the best investments. This prompted the government to roll out measures aimed at cooling the market.
Wednesday’s data showed that those measures have begun to show effect with November’s monthly price gains at its slowest this year.
According to Lau, the government is expected to impose more curbs in case prices continue to increase.
Nikki De Guzman, Junior Journalist at PropertyGuru, edited this story. To contact her about this or other stories email nikki@propertyguru.com.sg
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