Property market may cool as govt tightens policies
Housing markets in first- and second-tier cities in the Chinese mainland got hotter in March, taking transactions to a record high, according to industry data released on Wednesday.
As of Sunday, the total number of real estate transactions in 54 mainland cities in March had jumped 67.6 percent year-on-year to a new record of 320,000, data from the Beijing-based Centaline Property Research Center showed.
The number of transactions in second-tier cities showed the largest increase in the month, rising 98.3 percent from the previous year, according to the data.
"Panic sentiment" among buyers might have contributed to the record, noted analysts.
"The fast increase in house prices in some cities stimulated panic purchases in March," Yan Yuejin, a research director at the Shanghai-based E-house China R&D Institute, told the Global Times on Wednesday.
House prices in many cities have increased since the beginning of the year, particularly in first-tier cities such as Beijing and Shanghai, which saw prices skyrocket.
According to data released by the National Bureau of Statistics (NBS) on March 18, among 70 cities monitored, 47 saw housing price increases in February, with the largest gain reaching 3.6 percent, compared with the previous month.
On a year-on-year basis, the largest increase was 57.8 percent in February, according to the NBS.
New measures by some city governments to tighten purchasing policies and fight speculation drove some homebuyers into the market in March, Yan said.
Amid surging prices, some first-tier cities (for example, Shanghai) and second-tier cities (such as Shenzhen, South China's Guangdong Province) tightened their home purchase policies.
Under Shanghai's new policies that went into effect on Friday, the minimum down payment was raised to 50 percent from 40 percent previously. Also, nonlocal buyers must have paid income tax and social security in the city for five consecutive years. Up from the previous requirement of two years, the Xinhua News Agency reported on Sunday.
Shenzhen announced similar measures on Friday, with the down payment requirement raised to 40 percent from 30 percent, according to Xinhua.
"The effect of the new measures wasn't yet evident in March," Zhang Dawei, chief analyst at Centaline, told the Global Times on Wednesday.
The housing market probably peaked in March and is likely to stabilize in the coming months, according to Zhang.