- Average new home price up 0.6 per cent in June compared to the 0.71 per cent increase in May
China's new home prices rose for 50 months in a row in June, but the pace of growth slowed as a range of cooling measures initiated by the government kicked in.
The average cost of a new home increased by 0.6 per cent in June, slowing from 0.71 per cent jump in May and 0.62 per cent in April, according to calculations based on National Bureau of Statistics data released on Monday morning.
"The government has launched policies targeting developers one after another, which have cooled down the recent property buying craze," said Yan Yuejin, a research director with Shanghai-based property services firm E-House China R&D Institute.
He added that these rules were likely to remain in place for some time as the government would like to keep home prices under control.
In June, prices climbed in 63 of the 70 mainland cities tracked by the bureau. Shenzhen saw the biggest increase at 0.5 per cent among the top tier one cities of Beijing, Shanghai and Guangzhou.
Last month, five plots in Shenzhen fetched a combined 22.38 billion yuan (US$3.2 billion) in one day for the city government. The prices exceeded its minimum bids by 45 per cent after more than 80 developers took part in the auction.
In response to the overheating land market, the central government has been tightening restrictions on developers' access to funds on the onshore and offshore markets.
Chinese home builders 'hunger' for offshore bond markets after land spending binge prompts government clampdown on credit
In May, the China Banking and Insurance Regulatory Commission banned direct financing to developers with incomplete certificates or real estate projects that had not properly secured their full capital needs. The ban was later expanded to include indirect financing through equity investments and bond subscriptions.
On July 12, the National Development and Reform Commission said that any new offshore bond issues by real estate firms must be used only to replace medium- and long-term offshore debt maturing in the next year.
Developers have issued -overseas bonds worth more than US$4 billion in the first 10 days of July, compared with US$3.5 billion in bonds issued in June, according to calculations based on data from Wind Information.
Meanwhile, local governments like Hangzhou, for example, have placed caps on how much developers can charge for completed homes and interior finishes as part of the sale conditions for nine sites that will close for tender on July 29 and 30.
Land sold at government tender in China averaged 2,559 yuan per square metre in the first half, reflecting a gain of 24 per cent from the second half of 2018, according to data from property consultancy CRIC.
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