Jun 21, 2019 07:55 PM

Chart of the Day: Housing Market Slows Amid Tightened Regulations

Existing-home prices in both China’s first- and second-tier cities rose at a slower pace in May, official data show, indicating that tighter government controls have arrested a rebound in local property markets.

The average price of existing homes in the first-tier cities of Beijing, Shanghai, Guangzhou and Shenzhen rose 0.1% month-on-month in May, slower than a 0.4% increase in the previous month and ending a run of three consecutive months of accelerating growth, according to data (link in Chinese) released Tuesday by the National Bureau of Statistics (NBS).

The average existing-home price in 31 second-tier cities surveyed by the NBS rose 0.5% month-on-month in May, slower than April’s 0.6% growth and March’s 1.2% increase — yet still up from a 0.2% decline in February.

Existing-home prices usually better reflect market conditions in big cities as new-home prices and sales are subject to tighter regulation and greater government intervention.


The situation in new-home prices was similar. The average price of new homes in the four biggest cities rose 0.3% month-on-month in May, down from April’s 0.6% growth, yet up from March’s 0.2% increase. Meanwhile, the average price of a new home in second-tier cities rose 0.8% month-on-month in May, unchanged from April and up from March’s 0.6%.

Continuous regulatory tightening in May weighed on potential homebuyers’ sentiment, Zhang Dawei, chief analyst with a research center under the Hong Kong-based Centaline Property Agency Ltd., said in a note.

The stepped-up regulations came in the wake of a short-lived recovery in property markets.

 Read more
A special report on China’s real estate recovery against the backdrop of an economic slowdown

Amid an economic slowdown, local governments and developers had held high hopes for loosening restrictions on the real estate sector, a key pillar of domestic demand. Yet as usual, the central government needed to calm widespread complaints about soaring house prices, crack down on speculation and stay alert about a property bubble that could trigger turmoil in the financial sector.

In April and May, the Ministry of Housing and Urban-Rural Development issued warnings to 10 cities about their rapidly rising home or land prices — including Foshan, a southern manufacturing hub in wealthy Guangdong province, and Dalian, a port city in the northeastern rustbelt province of Liaoning, the official Xinhua News Agency reported (link in Chinese).

Niu Mujiangqu contributed to this report.

Contact reporter Lin Jinbing (

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