* Home prices in fresh record surge in November
* But month-on-month gains ease for 3rd consecutive month
* Signs growing that rises will ease on govt measures, more
(Recasts, adds developer comment)
By Xiaoyi Shao and Jonathan Standing
BEIJING, Dec 18 China's home prices rose at the
quickest annual pace on record in November, but signs emerged
that the government's four-year effort to cool the market may be
starting to bear fruit as monthly gains marked the slowest this
House prices in China have surged in the past year, in part
due to a view that property remains one of the best investments,
prompting the government to introduce targetted measures aimed
at restraining the market without damaging one of the pillars of
growth in a slowing economy.
Those measures have started to bite, with Wednesday's data
showing that monthly price gains in November were the slowest
this year, pointing to a moderation in rises in the coming
"The headline figure is quite alarming, though it's not
really new and there's been such high growth in the past mainly
due to the low base and rapid growth in the beginning of this
year," said Alfred Lau, property analyst at Bank of
Communications International in Hong Kong.
"The government also sees that. So that's why you see some
tightening measures, especially on mortgages. That also explains
the slow growth in November. We expect the momentum will
moderate going forward."
However, ordinary Chinese in most cities still face home
prices that are well beyond their reach, adding the threat of
social unrest to that of a bubble, and Lau noted that the
government may impose more curbs if prices continued to rise.
The hot housing market has provided a tricky challenge for
policy makers who are trying to steer the world's second-largest
economy towards more sustainable growth after three decades of
Analysts say Beijing won't want to see a sudden and sharp
downturn in property because of its importance to growth. The
economy is set to grow this year at about 7.5 percent, the
weakest pace since the Asia financial crisis in the late 1990s.
Average new home prices in China's 70 major cities in
November rose 9.9 percent from a year earlier, according to
Reuters calculations based on National Bureau of Statistics data
published on Wednesday, the fastest pace since records began in
But prices rose 0.5 percent in November in month-on-month
terms, the data showed, slowing from October's rise of 0.6
percent and the third straight slowdown since August's 0.8
Monthly gains had topped 1 percent earlier in the year. For
a full table, see.
GOVT MOVES TO SLOW RISES
A Reuters poll in November had also predicted a slowdown in
house price growth, with analysts forecasting a 5.0 percent rise
in house prices next year after a 10 percent gain this
They cited relatively tight credit control and government
curbs for the slower pace of growth. Those measures have
included raising minimum downpayments for second homes and
promising more land for building.
Official data on Dec. 10 showed total land area bought by
developers rose 9.9 percent in the first 11 months of 2013 from
a year earlier, reversing from a drop of 3.6 percent in the
first 10 months.
Developers see increased land as contributing to easing home
prices gains next year.
"The increased land supply this year means there will be
more home supply next year," Ren Zhiqiang, president of Hua Yuan
Property Company told a forum on Monday.
"History has told us that every time when there was a rapid
growth of land supply, it would turn into easing home price
Two private surveys released earlier this month had pointed
to lower house price rises, noting the impact of government
measures on market sentiment.
The government has promised more of the same for the
property market next year.
Beijing recently said that it would expand a tax on property
as well as make more land available, increasing its reliance on
market forces rather than administrative measures to rein in the
Reuters started its weighted China home price index in
January 2011 when the NBS stopped providing nationwide data,
only giving home price changes in each of 70 major cities.
(Additional reporting By Jenny Su; Editing by Shri Navaratnam)