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Report highlights decade of growth in property prices
Last Updated: 2016-02-26 16:33 | China Daily
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Cars pass by a housing block in Binzhou, Shandong province, Feb 4, 2016. [Photo/IC]

A new report has highlighted the extent of property price rises in China over the past decade.

Shenzhen, Guangdong province, has led the way, with prices soaring 508.5 percent in that time, said the study by the Hang Lung Center for Real Estate at Tsinghua University and the Peking University-Lincoln Institute Center for Urban Development and Land Policy.

The southern city's average annual price rise since 2006 has been 20.4 percent.

The next biggest increases were recorded in Shanghai (384.6 percent), with an annual rise of 17.6 percent, then Beijing (380 percent), with an annual rise of 17.5 percent.

Second-tier cities saw slower rises, the study found, with buyers in the Sichuan provincial capital Chengdu facing a 137.1 percent increase in the past 10 years, following by prices in Liaoning province's Dalian, which rose 128.8 percent.

The report said that government's market-easing measures such as interest rate reductions, a relaxing credit policy and weakened house-purchase quotas, have all worked to keep momentum within the property market.

It added that even a national property glut, the recent capital-market turmoil, exchange rate fluctuations, and slower economic growth have failed to dampen buyer enthusiasm.

The government's most recent move was to cut deed taxes on homes of more than 90 square meters for first-time buyers, from 2 percent to 1.5 percent.

Guo Yi, marketing director at Yahao Real Estate Selling and Consulting Solution Agency, said the country's real estate boom has been driven by China's surging economy.

"A prosperous economy will for sure result in a strong real estate market," she said. "Over the past decade, there has been a huge flow of capital and labor across the country, which has driven up demand for places to live."

She said the official measures highlighted in the report have also continued to allow people to buy multiple homes in most cities, which have kept prices edging ever higher. "That series of monetary and regulatory policies indicate that China's real estate market in 2016 will continue to enjoy a relaxed policy environment."

China's major developers have started the year in bullish mood, recording strong sales in January.

China Vanke Co Ltd, the largest residential developer by revenue, sold 25.59 billion yuan ($3.89 billion) worth of property during the month, a 10.3 percent increase, while Guangzhou-based Evergrande Real Estate Group raked in sales of 21.23 billion yuan, an 83 percent rise.

Vanke has just announced price rises at two of its flagship residential development sites in Beijing - new evidence the market's pace is still accelerating into 2016.

The joint report noted, too, that activity continues strong in the house-renovation and improvement sector, especially by owners of high-end, large- and medium-sized apartments.

Guo said those owning large apartments are still in the minority, with most buyers going for what are considered medium-sized purchases.

"In Beijing last year, 78 percent of sales were for small and medium-sized apartments below 120 square meters, while those under 90 sq m accounted for 58 percent," she said, and that is a trend which is likely to continue this year, helping to cut inventories further.

 

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