[] [BTBBT Daily - 12/19]Cities see prices for homes fall

--> AN increasing number of Chinese cities reported falls in new home prices last month, the National Bureau of Statistics said yesterday.

Excluding government-funded affordable housing, prices fell in 49 out of 70 cities in November, it said.

That compared to 17 in September and 34 in October, when cities recording price drops finally outnumbered those registering increases.

Prices remained unchanged from a month earlier in 16 cities and gained in the remaining five, by a maximum 0.2 percent, the bureau said.

In Shanghai, Beijing, Guangzhou and Shenzhen, the country's four gateway cities where austerity measures such as home purchase restrictions have been rigorously enforced, new home prices fell by between 0.3 and 0.4 percent from a month earlier. They dipped by between 0.1 and 0.3 percent in October after remaining unchanged for three consecutive months.

New home prices in Nanjing in east China dropped the most last month, down 0.7 percent from October, whereas those in Guiyang in southwest China gained 0.2 percent, the most across the country.

"More month-on-month decreases in new home prices will be witnessed among the 70 major cities and the trend is expected to last till the second or the third quarter of next year," said Yang Hongxu, an analyst with Shanghai-based E-house China Research and Development Institute.

"Average price of new homes will likely dip by a maximum 5 percent next year around the country, the first drop in nearly a decade."

In Shanghai, a survey by Soufun.com, a real estate website, found that nearly 80 percent of homeseekers expect price drops in the first half of next year and more than half surveyed said they would buy a house within the next 12 months.

Over the weekend, Star River, a luxury residential developer, said it was offering discounts at two of its projects in the city - 20 percent at Pudong Star River in Huamu and 15 percent at Shanghai Star River in Minhang District - making itself the first luxury home developer in Shanghai to launch a public price-cutting campaign.

Government data released yesterday also showed that prices for existing homes dropped in 51 cities in November from a month earlier, 13 more than in October.

On a year-on-year basis, four cities saw a decrease in new home prices last month, compared to two in October.

In the existing homes market, prices fell in 21 cities, compared to 13 registered a month earlier.

While more and more cities witnessed month-on-month price declines, housing sales also shrunk.

In November, commercial housing sales in China slipped 1.2 percent year-on-year, according to the statistics bureau.

China Vanke, the country's largest developer, saw its total floor area sold and sales volume plummet by 26 percent and 20 percent month-on-month.

China will keep its regulations in place until prices fall to a reasonable level, according to a statement after last week's annual central economic work conference. "The country will speed up the construction of commercial residential housing to increase the effective supply and promote the healthy development of the property market," it said.

It also said that China will appropriately handle the investment, financing, construction, operation and management of affordable housing projects and solve housing problems for low-income urban residents, newly-employed workers and migrant workers from rural areas.

"The government has set a clear tone for reining in runaway housing prices next year," Wang Yulin, vice director of the policy research center under the Ministry of Housing and Urban-Rural Development, told Xinhua news agency.

Wang said China should retain tight control over the property sector, as even a slight change in policy could result in dramatic price rebounds.