Policymakers' push sees Chinese home sales begin to slow
China's new-home sales growth slowed in October from a year earlier, suggesting the push by policy makers to rein in runaway prices is getting traction.
The value of homes sold rose 38pc to 941bn yuan (€128bn) last month from a year earlier, according to Bloomberg calculations based on data the National Bureau of Statistics released on Monday. The increase compares with a 61pc gain the previous month.
Local authorities in nearly two dozens cities have since late September rolled out property curbs ranging from raising down-payments for first and second homes to ruling some potential buyers ineligible.
China's banking regulator has told banks to review their business related to mortgage lending and property development loans, after China Minsheng Banking Corp. suspended approvals of some non-standard mortgages in Shanghai. Slower home sales have helped moderate credit growth.
New medium- and long-term household loans, mostly residential mortgages, stood at 489.1bn yuan in October, down from 571.3bn yuan in September, according to central bank data issued last Friday. New yuan loans edged down to 651.3bn yuan last month from 1.22 trillion yuan in September.
Steps taken by Hong Kong's chief executive Leung Chun-ying, meanwhile, to cool the region's property market through higher stamp duty rates appear to have had an immediate effect, judging by the fall off in activity recorded last weekend.
Citing market data, the Hong Kong Times reported that there were 35 transactions in the primary market, the lowest number in 38 weeks, and just a fraction of the 129 transactions recorded the previous weekend.
The fall off in activity came after Hong Kong's government raised stamp duty rates on November 5 last to 15pc for all residential purchases except for first-time buyers who are permanent residents. Up to then, the highest levy for residents had been 8.5pc, while foreigners were required to pay a 15pc stamp duty.
Describing the move as "unexpected", Louis Chan, chief executive of the residential unit of Centaline Property Agency Ltd, said: "It's a very heavy measure and shows the government is very determined to cool the property market."
Chan said he now expects a 5pc to 8pc drop in prices, after projecting an increase of similar magnitude before the stamp duty increase was announced.