China home prices ease for third consecutive month

BEIJING (Dec 1): Average home prices in 100 Chinese cities slipped 0.3% in November, the third month of a modest pullback in the face of government measures to curb an exuberant housing market, a private survey showed on Thursday.

The China Real Estate Index System (CREIS), affiliated with China's largest online real estate company Soufun Holdings Ltd , said average home prices slipped to 8,832 yuan (RM4,368.41) per square metre in November from October's 8,856 yuan per square metre.

Average home prices eased 0.2% in October and 0.03% in September on a monthly basis. The pullbacks, although modest, are an anomaly in China where home prices have risen relentlessly to record highs in recent years.

But softer home prices and a rapidly-cooling world economy have led some investors to worry that property prices may fall too far, too fast and drag China's economy into a hard landing.

The CREIS data is closely watched by investors who believe it is better at foretelling property price trends than figures released by the government.

Despite the data, property shares rose 3.2% on Thursday, rallying on Beijing's decision to cut bank reserve requirements for the first time in three years on Wednesday in a sign of a shift to monetary policy easing.

China Vanke Co Ltd, China's biggest-listed home builder by revenues, surged 4.7%, outperforming a 2.3% rise in the Shanghai Composite index.

CREIS said prices in China's 10 most expensive property markets slipped an average 0.4% in November from October, keeping up with the pace seen in October.

It said that among the 100 cities monitored, November prices rose in 43 cities on a monthly basis and fell in the remaining 57. From a year earlier, average home prices were up about 4%, compared with October's 5.2% gain.

Official data has painted a trend of falling home prices as well. It showed new home prices ticking lower for the first time this year in October.

Worried that unaffordable housing may stir social discontent, Beijing has taken an array of steps including introducing a modest property tax, and raising mortgage rates and downpayments to contain prices. — Reuters