UPDATE 1-China’s home price growth hits near 2-year low as coronavirus spreads
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Jan new home prices grow 0.2% m/m vs 0.3% in Dec
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Jan annual new home prices expand 6.3% vs 6.6% in Dec
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47 out of 70 cities reported higher prices vs 50 in Dec
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Coronavirus impact yet to be fully reflected - analyst
BEIJING, Feb 17 (Reuters) - New home prices in China grew at their weakest pace in nearly two years in January, as the economy slows and a fast-spreading coronavirus outbreak brings the country’s property market to a standstill.
Average new home prices in China’s 70 major cities rose 0.2% in January from the previous month, lower than a 0.3% gain in the previous month and marking the slowest pace since February 2018, according to Reuters calculations based on National Bureau of Statistics (NBS) data released on Monday.
Home sales have plummeted as the virus outbreak keeps property showrooms shut and potential buyers are afraid or unable to venture outside for long.
“Overall, the prices data have yet to reflect the impact from the coronavirus. There will be widespread price cutting in the country in February,” said Zhang Dawei, a Beijing-based analyst with property consultancy Centaline in a note to clients.
Most of the 70 cities surveyed by the NBS still reported monthly price increases for new homes, though the number was down to 47 from 50 in December.
Speculation is growing that more local governments and banks may relax restrictions on buyers to reduce pressure on the economy. China has clamped down on property speculation since 2016 to stop prices from overheating, but they had still risen for nearly 6 straight years.
China Evergrande Group, the third-largest developer by sales in the country, said on Sunday that it will offer 25% discount for all properties on sales from Feb 18 to Feb 29.
Indeed, property developers and realtors are turning to virtual reality salesrooms, livestream marketing and generous incentives but the market has all but ground to a halt.
January property sales by value reported by Chinese top 100 developers fell 12% from same period a year earlier, according to property researcher CRIC. The NBS will only release January-February combined official sales data in March.
“The required closure of sales offices of property developers may challenge their liquidity conditions amid rising debt repayment pressure and the cooling property sector, especially for those with high exposure to virus-affected regions,” analysts with Nomura said in a note prior to the data release. (Reporting by Lusha Zhang, Yawen Chen and Se Young Lee; Editing by Kim Coghill & Shri Navaratnam)
