Most Chinese cities post lower home prices

China’s December home prices posted their worst performance last year, with only two of the 70 cities tracked posting gains, and may drop further as Beijing sticks to its campaign to bring housing costs back to levels that the government considers reasonable.

Prices in 52 of 70 cities monitored by the government declined from the previous month, the National Statistics Bureau said yesterday.

New home prices in the four major cities of Shanghai, Beijing, Shenzhen and Guangzhou declined for a third month, it said.

“The downtrend of China home prices is consistent with our expectations,” said Mr Liu Li-Gang, an economist at Australia and New Zealand Banking Group.

“The government policies have achieved the intended results. What we’ll need to watch next is if the falling home prices will increase the risk of hard landing in the Chinese economy.”

A gauge tracking property shares on the Shanghai Composite Index closed down 1.7 per cent yesterday, compared with a 1.4 per cent decline on the benchmark measure.

The eastern city of Wenzhou posted the biggest on-month drop of 1.9 per cent, according to the data. The only two cities that had recorded gains, Guiyang in the west and Yinchuan in the north-west, posted increases of 0.1 per cent each.

Among the four major cities, Beijing declined 0.1 per cent, while Shanghai fell 0.3 per cent.

Source : Today – 19 Jan 2012

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