China's January Home Prices Drop

BEIJING, Feb. 18 (Xinhua) -- Housing prices in China continued to fall in January as the government maintained its determination to stabilize the real estate market.

In January, 48 cities out of the statistical pool of 70 major cities saw drops in new home prices from December, while new home prices in 22 cities remained unchanged, the National Bureau of Statistics (NBS) said on Saturday.

None of the 70 surveyed cities reported increases in new home prices last month, the data showed.

Previous data showed that in January 2011, a total of 60 cities out of the 70 cities saw rises in new home prices. While in July, after the government introduced measures to control house prices, 39 cities saw price gains in July and in December the number was reduced to two.

The NBS also said Saturday that price drops of resold homes widened to 54 cities in January, up from 51 cities one month ago. Resold home prices remained unchanged in 11 cities. The NBS also said the five cities that saw price rises in resold homes in January reported a price gain of no more than 0.1 percent from December.

Since 2010, the country has imposed a raft of measures aimed to cool property prices. Those measures include higher down payments, a ban on third-home purchases, a property tax in some cities and the construction of low-income housing.

In year-on-year terms, new home prices dropped in 15 cities in January, up from nine in December, while resold home prices declined in 37 cities, up from 29 in December, according to the NBS data.

Yin Zhongli, a finance researcher with the Chinese Academy of Social Sciences, said that around 69 percent of the surveyed cities registered dips in new home prices last month, which showed that a general downward trend for home prices had formed.

The decline in prices has triggered speculation that the government might ease its housing market controls.

The eastern Chinese city of Wuhu announced a money subsidy and tax exemption for home buyers last week, but three days later the city decided not to introduce the measures.

Yin predicted that the government's tightening measures would not be withdrawn with any time soon.

"Some local governments do not wish to see a sluggish real estate market, however, the current month-on-month home price decline is very small. And on a year-on-year basis, property prices are still higher in many cities," Yin said.

Yin said property price controls will only be relaxed after home prices drop significantly across the board.

He also forecasted that housing prices might see steeper falls in the second half of this year if the government maintains its monetary tightening and home price control policies.