After experiencing almost unstoppable, and strong price rises over the past year, it seems as though there are signs that activity is finally beginning to cool for real estate in China.
This will be an encouraging sign for home buyers in the country, as prices have skyrocketed in recent months and placed a strain on housing affordability in many capital city markets.
According to new figures released by the National Bureau of Statistics of China, sale prices for newly constructed commercial residential buildings over January increased in 62 cities and stayed the same in two cities.
Interestingly, sale prices declined in six medium and large cities across the country. This is a slight rise in the number of cities that experienced a decline in December, when there were only two cities that recorded a decline in sale prices.
The largest recorded increase for real estate in China was 1.2 per cent for the month, while the biggest fall was down by 1.5 per cent.
Compared to the results from January 2013, sale prices for commercial residential buildings have fallen in one city, while increasing in 69 cities across China. This shows just how strong the market has been in the last year and may signal the level of investment in China's property market.
Although brand new property in China has seen some substantial activity, it's the established dwelling market which may be seeing prices cooling down a lot faster. The National Bureau of Statistics of China found that sales prices for second-hand residential dwellings actually fell in 13 cities across the country, while nine cities remained the same.
At the same time, established dwellings have seen larger decreases in price over January, signalling a slow down in this activity in the new year.
The highest increase was 1 per cent and the biggest fall was 1.9 per cent. This is a small shift from what was seen in December, where the largest recorded drop was 1.8 per cent.
Prices for real estate in China are still high in many parts of the country, and the government and lending institutions have tried to put measures in place to cool down price growth.
In a February 24 article from Bloomberg, Mizuho Securities Asia Economist Shen Jian-guang said that there has been "firm determination by the Chinese government to curb the property market".
"Measures on the financial market are having an impact on the property market. We should see a turning point this year when home prices in China's first-tier cities stop rising," he told Bloomberg.
For more information about investing in residential real estate in China, get in touch with Ray White Group at www.raywhite.com.
