Affordability Slowly Improving for China Real Estate
Sale prices for residential real estate across China are continuing to slow gradually, providing more optimism for many home buyers in the country. After months of sharp and significant price rises last year, this activity is a welcome result for entrants to the property market.
New figures released from the National Bureau of Statistics of China found that sales prices for brand new residential properties in March only increased in 56 out of a total of 70 cities in the country.
At the same time, sale prices remained the same in 10 cities while figures declined in four other medium and large sized cities.
In comparison to results seen in February, the highest price increases have fallen slightly too. In March, the Bureau of Statistics found the highest price rise was 0.6 per cent, dropping by 0.1 per cent from February.
Established homes could be cheaper option
While sale prices for brand new properties are slowing, it's evident the established property market is also winding down, aiding the affordability of homes for buyers. In March, the National Bureau of Statistics identified that only 42 medium to large cities in China saw sale prices rise. This is a small but notable fall from what was seen in February, when 46 cities recorded a rise in prices.
Over the 12 months to March, prices for established dwellings have increased as much as 13.2 per cent in some cities, however this is still notably lower than the year-on-year price gains for brand new properties. As a result, this activity suggests that established dwellings are likely to be a better purchasing option for buyers who wish to gain a foot in the door to the Chinese property market.
Efforts to cool prices
Rapidly rising house prices have been a point of concern for the Chinese government for quite some time, as this activity places a large strain on people and families who are searching for a home. In light of this matter, the government has attempted to tackle price rises and build more affordable housing projects, while also enforcing financial and purchasing restrictions.
Another effort recently announced by the government is the introduction of a national property registry. This system is hoped to be established and in action by 2018 and will allow the government to keep track of home ownership in the country. Coupled with restrictions on how many properties people are allowed to buy, this system will be beneficial for those looking for an entry point into the rapidly growing Chinese real estate market.