Visitors look at a model of a housing project at a real property exhibition in Beijing. (Photo provided to China Daily)
Residential property gathers speed in lower-tier cities even as metros withstand curbs, higher prices
China's lower-tier cities are stealing the residential property market thunder from bigger places as home prices continue to rise, thanks to fewer restrictions on purchases there.
But realty industry experts said first-tier cities, which have seen curbs to prevent overheating amid speculative investments, will stay resilient and stable in the longer term.
Contracts were struck online for some 360 apartments in first-tier cities during the first two days of the May Day holiday. The figure more than halved year-on-year, according to data from property consultancy Centaline.
Yet, the housing market in major cities saw steady performance in March and April. But the transaction volume has not returned to peak days seen before policy-tightening late last year, said Zhang Dawei, chief analyst at Centaline Property Agency Ltd.
According to data from the National Bureau of Statistics, prices of new homes in top-tier cities edged down 0.6 percent year-on-year in March; while in the secondary market, residential property prices slid 0.1 percent from a year ago, the first such drop in recent years.
Liu Jianwei, a senior statistician at the NBS, attributed the return of stability in the residential property market to measures by local governments as well as the continuity in the provincial-level housing policies.
The macro-level policies that took effect in the past year have been effective, and home prices in first-tier cities will be stable throughout this year, said Zhou Jing, head of project sales, JLL Shanghai, an international real estate consultancy.
"First-tier cities were some of the earliest to implement (market-) cooling measures and continue to have some of the toughest restrictions, while also having some of the highest prices," said James Macdonald, senior director of Savills China research, another international real estate consultancy.
A report from the Shanghai University of Finance and Economics or SUFE had a similar conclusion, suggesting both new homes and pre-owned residential properties are showing a downward trend, the China Youth Daily reported.
By analyzing NBS data on China's major 70 cities between the second half of 2017 and February this year, the SUFE report found that these cities' new home prices' growth rate declined significantly from the first half of 2017, and most of the growth was contributed by second-and third-tier cities.
Sales revenue growth of new homes in first-tier cities also slumped from nearly 20 percent in the first quarter of 2017 to a decline of 1 percent in the first quarter of this year.