As authorities tightened the real estate sector rules, China’s new home prices hit their slowest pace in July. Restrictions also affected some categories of procurement.
Average new home prices became 0.3% in July in 70 major Chinese cities. This is according to data released by the National Bureau of Statistics (NBS). In June, this number decreased by 0.5%.
Due to tighter financing conditions, the data showed that real estate investment slowed in January-July compared to last year’s same period.
The Chinese real estate market has recovered rapidly since the COVID-19 crisis, leading to some financial risks.
This year, all this has forced the government to tighten restrictions on processes such as lending to banks, borrowing from developers, instructing banks to raise mortgage rates, and prevent illegal financing in the market.
Definitions and Real Estate Market Statistics
According to Zhang Dawei, chief analyst of the real estate agency Centaline, it is evident that the growth of prices is slowing down in most cities. Moreover, to normalize credit policy, foresight shows a reduction in housing price growth.
Last month, the ruling Communist Party’s decision-making body reiterated that the houses are for housing, not speculation.
The Shenzhen Southern Technology Center authorities say the $ 332.46 million loans, typically intended for businesses, have been used illegally for home purchases.
In Shanghai and Beijing, one of China’s largest cities, price growth fell to 0.4% in July.
In Beijing, after owning two real estate, residents cannot buy additional housing.
According to Centaline, the government imposed the most 380 new restrictions on the sector this year.
Over time, we will see how effective and beneficial the imposed restrictions will be for the Chinese real estate market. However, it is already a fact that price growth has slowed down compared to the previous year.