BOFIT Weekly Review 2015/40
Situation in China’s housing markets remains mixed
Official figures and data produced by private firms indicate that housing prices overall continued to rise in August. According to SouFun, China’s largest real estate portal, average apartment prices in August were up 2 % from the start of this year and roughly the same as a year ago. Official figures, in contrast, show that apartment sales, measured by liveable floor space and value of sales, were down 10 % y-o-y.
Several policy changes have been made to support the housing market. The downpayment required of buyers of a second apartment who have paid off their previous apartment mortgage was lowered at the beginning of September from 30 % to 20 % of the second apartment price. The reference rate on loans of five years or more and the interest rate on loans taken from public housing savings banks were also lowered at the end of August. The possibilities for foreign institutions and private individuals to purchase an apartment were expanded.
Growth in real estate investment continued the slow, falling below 4 % y-o-y in August. New housing starts were down 17 % y-o-y. The volume of construction-zoned land sales fell 32 % y-o-y in the first half. Developers still are stuck with a significant backlog of unsold new apartments, even if the overall number is declining.
Trends in China’s housing markets (98-city sample)
Sources: SouFun, Macrobond.