Chinese house prices rise sharply

China’s new home prices in December jumped by the most last year even as the country’s biggest cities tightened property controls to moderate price gains.

The average price rose 12% from a year earlier to 10,833 yuan ($1,789) per square metre (10.76 square feet), SouFun Holdings Ltd., the nation’s biggest real estate website owner, said in an emailed statement yesterday based on a survey of 100 cities. Prices climbed 0.7% from November.

Premier Li Keqiang has refrained from adding national property curbs that could hurt economic growth, after predecessor Wen Jiabao in March stepped up a three-year campaign to rein in home prices. Almost one fifth of respondents in a Renmin University of China survey gave a zero score on the government’s property policies, indicating “near despair” on housing prices, the official China News Service reported this week, citing survey results.

“The supply shortages remain noticeable in some hotspots, and the pressure on home-price gains continues to exist” going into 2014, SouFun said in the statement.

At least 10 Chinese cities, many of them provincial capitals, have tightened local property policies since November, with major cities of Shenzhen, Shanghai and Guangzhou all raising minimum down payments for second homes to 70%. Beijing was the first to lift the level from 60% in March after Wen told cities with excessive price gains to do so.

New home prices in Shenzhen posted the biggest gain in almost three years in November, rising 21% from a year earlier alongside Guangzhou, according to the latest data from the National Bureau of Statistics released on Dec 18.

The city of Xiangtan in Hunan province led gains in December, with prices rising 3.5% from the previous month, according to SouFun data. Prices dropped 3.3% in Foshan located in the southern province of Guangdong, the biggest decline nationwide.

Beijing and Guangzhou posted the largest year-on-year gains among the 10 biggest cities SouFun surveyed, both rising about 28%. Tianjin recorded the smallest increase, with new home prices climbing 6.1%, according to SouFun.

A statement issued after last month’s annual Central Economic Work conference didn’t mention real estate curbs as a policy initiative for this year.

Bloomberg