China’s housing market is slowing, as seen in the chart below.
According to data released by China’s National Bureau of Statistics (NBS), new home prices grew by 0.2% in September, seeing the increase on a year earlier slow to 6.3%, the weakest increase since April 2016.
Of the 70 cities tracked by the NBS, prices rose in just 44 over the month, down on 46 in August and the fewest since January 2016.
The national slowdown was led by China’s largest cities, continuing the pattern seen since the beginning of the year.
Prices fell by 0.5% in Guangzhou, outpacing declines of 0.1% and 0.2% in Shanghai and Beijing respectively. Prices in Shenzhen were flat over the month.
From a year earlier, prices in Shanghai were unchanged, a stark turnaround from the 30% plus levels seen this time a year ago.
Prices in China’s capital, Beijing, fared a little better, lifting 0.5% over the year. However, that too was well below the 20% plus levels seen just six months ago.
Elsewhere prices in Tianjin and Guangzhou rose by 1.8% and 9.4% respectively over the year, while those in Shenzhen fell by 3.7%.
The sharp deceleration reflects attempts from policymakers to slow rapid price gains, introducing buying and selling restrictions in many larger centres to quash growing levels of speculation that were evident for much of last year.
In his opening address to the National People’s Congress last week, Chinese President Xi Jinping told party members that homes are built to be inhabited, not for speculation.
Based on the recent price moves in China’s largest cities, it appears that attempts to reduce speculative activity are working.