China continues to see slowing price growth for new housing with figures for September again showing a distinctive deceleration. In fact according to figures from Reuters, September saw the slowest rate of increase for 17 months.
The average cost of new housing in 70 major cities rose at an annual rate of 6.3% last month, according to a weighted average from Reuters based on official data from China’s National Bureau of Statistics.
That was the tenth straight monthly of slowing from a peak of 12.6% in November 2016 as well as the slowest rate of growth since April of last year.
Price growth slowed markedly in top-tier cities, with prices in Beijing up just half a per cent from a year prior and those in Shanghai falling slightly.
In year-on-year terms prices rose in all but three of the 70 cities surveyed last month, with the notable exceptions being Shanghai (down 0.1%), Shenzhen (down 3.8%) and Chengdu (down 2.8%).
Price growth in Beijing was just 0.5% year on year.
Reuters said prices rose 0.2% in month-on-month terms, unchanged from August and again marking the slowest sequential growth since January.
September also saw month-on-month price falls in 18 cities, unchanged from August.
And new home prices rose in 44 of 70 cities in September from a month earlier, compared with 46 cities in August. Prices of new homes increased in 67 of 70 cities in September from a year earlier, compared with 68 in August.
The slowing rate of price growth follows on the heels of official figures showing the first drop in residential floor space sold in two and half years.
China’s housing market has seen a near two-year boom, helping boost the wider economy and producing the better than expected 2017 growth rates. GDP was up 6.8% annual in the September quarter which was after a 6.9% rate earlier in the year and well ahead of the official target of “about 6.5%.
That boom has stirred fears (again) of a property bubble and official concerns about rising debt levels. Much of the spending seems to have been done to make the economy look better for this current session of the National Congress and to help the re-election of President Xi.
The central bank warns that household debt is rising too quickly (a view not unknown in Australia, NZ and parts of Europe and Asia).
