Published By : 18 Nov 2015 | Published By : QYRESEARCH
China home prices went up for the first time in 14 months in October on a yearly basis, indicating the stabilization of a housing market that could help the recovery of a listless economy.
However, analysts say that a rapid rebound of property prices is rather unlikely owing to high inventories in almost all cities, barring the larger ones. This has forced developers to bring down the speed of expansions or halt them altogether in order to safeguard their cash flows.
Head of research at Centaline, Shanghai based property consultant, Liu Yuan said that most market players are sort of pessimistic for next year because policy effects have been fading away and new constructions are still declining.
Average prices of new homes went up 0.1 per cent last month from the previous year, according to calculations made by Reuters based on data from the National Statistics Bureau. This reversed the 0.9 per cent decline in September, signaling the first year on year gains since August last year.
The housing sector accounts for 15 per cent of the GDP in that country and even a moderate recovery is a welcome change for the economy that has been recording the weakest growth in a quarter of a century.
Real estate stocks in China were fueled by these numbers. The Poly Real Estate and Greenland Holdings went up by almost 10 per cent and the Shanghai stock exchange property subindex went up over 4 per cent.
The data by the National Statistics Bureau indicated that larger cities have dominated the upturn of home prices and Shenzhen is the leading city. Prices in this top performer went up 39.9 per cent last month from the previous year, developing at an annual rate of 37.6 per cent from September.