Property Prices in Beijing and Shanghai Finally Stop Rising
19 August 2011
It looks as if the cooling measures implemented by the Chinese government are having the desired effect, as property prices in Shanghai and Beijing have stopped rising for the first time this year.
According to the statistics bureau in China, new home prices in these two cities remained unchanged from June to July, and prices fell in 14 out of the 70 cities monitored by the government. Chengdu and Ningbo registered the biggest price falls at the 0.3% each month on month, but new home prices rose in 68 out of the 70 cities year-on-year to July.
In Beijing new house prices rose by 1.9% in July from a year ago, while in Shanghai they increased by 2.5%. The city which posted the largest gains was Nanchang, where prices increased by 9.3%. Prices of resale property increased by 1.8% in Beijing from a year ago, and they increased by 3.8% in Shanghai.
The Chinese housing ministry has already put forward a more criteria for reining in house prices in smaller cities, and this looks like the start of the downward trend in property prices in the country.
Economists expect to see more price declines in more cities during the coming months. The Chinese banks have already been told to tighten lending for property, and this is starting to impact developers. The full extent of the government restrictions is expected to continue deepening over the next few months, and some experts expect to see home prices begin to fall from September onwards.