SHAFAQNA – Falls in China’s housing prices accelerated in December, a survey showed Wednesday as oversupply continued to weigh on the market and developers offered discounts to shore up their balance sheets towards the year-end.
The average price of a new home in China’s 100 major cities was 10,542 yuan ($1,700) per square metre this month, down 0.44 percent from November, the independent China Index Academy said in a statement.
The decrease was faster than November’s 0.38 percent fall and marked the eighth straight month that prices have dropped, according to academy data.
On a year-on-year basis, prices fell 2.69 percent in December, greater than the 1.57 percent recorded last month, the statement said.
“Pressured by their annual sales targets and the need for liquidity generation, property companies continued to take the low-price strategy to promote sales, leading prices in the 100 cities to continue to fall,” said the statement.
“Looking into 2015, the national market will still be under high inventory pressures… and downside pressures remain on house prices,” it added.
The average price in the top 10 cities also fell for the first time in 26 months to 18,878 yuan per square metre, down 0.61 percent from a year ago, the statement said.
Beijing, Shanghai and the southern boom town of Shenzhen bordering Hong Kong were the only three top 10 cities to see annual price rises, it said, with Shanghai the best performer with a 2.46 percent increase to 32,029 yuan per square metre.
China has previously sought to rein in runaway property prices, a source of discontent among ordinary citizens, by introducing market control measures including limits on buying second and third homes.
But local authorities rely on the property sector for a significant proportion of their income, and cities began rolling back some of the measures this year as China’s economy slowed and the central government relented.
The central bank in September eased mortgage policies for the real estate sector and last month announced a surprise interest rate cut — the first in more than two years — that analysts said would benefit home buyers the most.