More Chinese cities witnessed home prices drop last month, according to official data, indicating that the government’s cooling measures could actually be taking effect.
The National Bureau of Statistics data, which was released a day after authorities moved to further restrict lending by banks, revealed that prices of newly-built houses were lower in March than in February, in 12 of the 70 major cities monitored.
The prices of new houses fell in eight cities in February, while only three cities had seen prices decline in January.
In March, home prices remained unchanged in eight cities, while 29 cities showed gains lower than those seen in February.
Among major cities, Beijing’s home prices remained unchanged, while Shanghai’s prices saw a slight 0.2 percent increase, according to the statistics bureau.
However, experts say the data is unlikely to deter the government’s efforts to cool the market in the short term.
“The easing monthly property price data showed the administrative measures are having an effect,” said Chen Sheng, Vice President of the China Index Academy. “But authorities will not soften their stance, so as to prevent any possible price rebound.”
Meanwhile, 16 cities showed price decreases for pre-existing home sales in March, up from four cities in February, while prices remained unchanged in 10 cities.
Since late 2009, China has implemented various measures to cool the market, including bans on acquiring second homes in some cities, while cities such as Chongqing and Shanghai have implemented trial property taxes.
On 17 April, China’s central bank increased the amount of money banks must keep in reserve. This effectively cut banks’ lending power, as it tried to control inflation, which reached its highest level in March, since July 2008.
Prime Minister Wen Jiabao told China’s legislature in March that the government would launch a campaign to develop affordable housing to quell growing public concern over increasing prices.
“There are likely to be more cities reporting a monthly fall in newly built home prices in the coming months, due to China’s tightening policy in the sector,” said Hui Jianqiang, Head of Research of Beijing-based China Property Research Technology.