Property prices in China's 70 large and medium-sized cities rose 1.6 percent year-on-year in October, the lowest growth rate since 2006, the National Development and Reform Commission (NDRC) said yesterday.
Shenzhen, with a price drop of 15 percent year-on-year for new residential housing and 17.4 percent for pre-owned housing, saw the biggest decrease in the country.
Property prices in Beijing and Shanghai experienced declines of 0.2 and 0.4 percent compared to September, but still maintained positive year-on-year growth of 5.2 and 0.4 percent respectively.
Thanks to the government's package of measures to revitalize the property market, the transaction volume is rebounding in some key cities.
On Oct 23, the Ministry of Finance and the central bank announced that the property purchase tax would be lowered to 1 percent for people buying their first home if it is smaller than 90 sq m. The new rate took effect on Nov 1.
Statistics from the Beijing Real Estate Transaction website show that 1,188 pre-owned houses changed hands in Beijing in the first week of this month, compared to 499 in the last week of October.
"The government's efforts are aimed at protecting the property industry rather than preventing further declines in property prices," said Qin Xiaomei, research chief at CB Richard Ellis' Beijing branch.
Due to people's conservative expectations of China's economic growth in 2009, Qin said the wait-and-see attitude in the property market may persist to early 2009 and the market is unlikely to rebound in the short term.
The high-end property sector, which was little affected in the first half of the year, also saw a big drop in prices in the third quarter, according to a Jones Lang LaSalle report.
The average price of Beijing's high-end residential apartments fell 5.5 percent quarter-on-quarter from July to September, the first time since the first quarter of 2006.
"The fall in high-end apartment prices suggests that the top end of the market is not immune to the overall downturn and it may be a sign of the likely direction of the market," said Denis Ma, Head of Research of Jones Lang LaSalle Beijing.
Source: China Daily
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