BEIJING, Aug. 1 (Reuters) – China's new home price growth slowed for the first time in five months in July, with smaller cities being hit particularly hard by higher mortgage rates, resale price caps and other moves to curb speculation private sector survey showed on Sunday.

According to data from the China Index Academy, one of the largest independent real estate research companies in the country, new construction prices in 100 cities rose 0.35% in July compared with 0.36% in June.

This year, Chinese authorities have taken measures to contain the red-hot real estate market, including caps on borrowing from property developers and strict bans on illegal cash flows into the sector.

"New home growth slowed in July amid tough policies and tighter lending," said group director Cao Jingjing.

Home sales growth is expected to remain mild as restrictions are unlikely to be relaxed, the survey said.

In July, the Chinese Ministry of Housing urged five cities, including the eastern city of Jinhua and the southeastern city of Quanzhou, to stabilize their property markets, while the central bank ordered Shanghai lenders to raise mortgage interest rates.

Prices in China's smaller Tier 3 and Tier 4 cities rose 0.21% month-over-month from 0.29% in June. Second category cities, which include some provincial capitals, gained 0.29%, slowing from the 0.31% increase in June.

However, price growth in China's largest cities such as Shanghai and Beijing continued to accelerate, up 0.54% from its 0.48% growth in June, suggesting continued demand for real estate in the country's most economically dynamic cities.

But new home prices in Shenzhen's southern tech center fell 0.26%, the first drop since February. Local media warned in May that due to the rise in property prices, Shenzhen could be a test bed for China's plans to introduce a nationwide property tax.

On an annualized basis, new home prices in China rose 3.81% in July and slowed from a 3.89% increase in June.

The story goes on

Resale properties also showed slower month-over-month price growth in July, while existing home prices in Shenzhen fell 0.43% month-over-month.

Local governments in some hot real estate markets may implement price references for resale properties to help stabilize prices, the survey found.

Land sales by area in 300 cities declined 25% month-over-month in July and declined 38% on an annualized basis, according to separate survey data.

The National Bureau of Statistics will release official data on China's house prices in mid-August. (Reporting by Liangping Gao and Ryan Woo; editing by Edmund Klamann)

source https://seapointrealtors.com/2021/08/01/china-new-home-price-growth-slows-in-july/

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