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China Home Prices Resume Upward Climb as Virus Impact Abates
Residential home prices in China rose in March as pent-up demand supported sales.
17 Apr 2020, 04:40 AM IST
(Bloomberg) -- Residential home prices in China rose in March as pent-up demand after a period of lockdown during the height of the coronavirus supported sales.
- New-home prices in 70 major cities, excluding state-subsidized housing, gained 0.13% in March from February, National Bureau of Statistics data released Thursday showed. Price growth effectively stalled in February because there were hardly any transactions as people stayed at home
- Values for second-hand residences, which are free of government intervention, rose 0.05% after a slim decline in February
- “Pent-up housing demand is being released gradually as the economy and life start to get back on track,” the bureau’s chief statistician Kong Peng said in a statement along with the data
Key Insights
- The reading is the first proper insight into China’s virus-hammered home market as authorities gradually lift restrictions and allow residents to get back to work. Last month, prices in about one-quarter of cities monitored by the statistics bureau were deemed unchanged due to a lack of activity
- Sales are recovering quickly as authorities allow developers to reopen showrooms and property agents conduct viewings. New apartment sales tripled in March from February, E-House China Holdings Ltd. data on 27 major cities show
- Whether the slight home-price growth in March is a precursor to a full rebound remains to be seen. State-owned newspapers have reported that the virus won’t change President Xi Jinping’s stance that homes are for living in, not for speculation. There’s also a chance China’s provinces will shut down again should there be a second surge in virus cases. If that happens, the housing-market fallout could be akin to the hit taken during the 2008 global financial crisis, according to S&P Global Ratings
- For now at least, developers are seizing upon the momentum to ramp up sales. The country’s major home builders have achieved better-than-expected online transactions by offering price discounts of between 5% and 10%, according to CGS-CIMB Securities analyst Raymond Cheng
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- Looking beyond February’s distortion due to the outbreak, the price growth in March is still weaker than January. In March versus February, the number of cities seeing a slide in values in the new-home market held broadly stable and even increased in the second-hand market
- Prices in two cities in Hubei province, the original epicenter of pandemic, are still considered unchanged, the statistics bureau said
- For more details from the home-price data, click here
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