China's residential property prices continued to stabilize in April, but things are different when it comes to commercial property. Shanghai on Wednesday launched a citywide clean-up of some commercially titled apartment projects.
Of the 15 first- and second-tier cities surveyed, nine saw either no price changes or month-on-month price declines in April, while five saw price gains of less than 1.1 percent. By contrast, residential property prices in smaller cities continued to rise under some upward pressure. Tangshan in Hebei Province saw a month-on-month jump of 2.3 percent and Bengbu in Anhui Province saw an increase of 2.2 percent.
"The fourth and fifth-tier cities are recording relatively strong growth -- about 0.8 percent to 1 percent month-on-month, while some first-tier cities and second-tier cities which were overheated last year saw more moderate price growth, which I think is again what the government really wants to try to achieve," said James MacDonald, head of China Research of Savills China.
Residential property prices in Shanghai in April fell by 0.2 percent compared with March, as the city government continues efforts to clean up the market. Shanghai announced on Wednesday that it will no longer approve what are essentially private apartments in buildings licensed exclusively for office use.
Developers of such projects have frequently altered the interior structure of the buildings, and quietly installed toilets and gas lines for cooking. The Shanghai government said nearly 17 million square meters of such developments will now be required to be restored to their originally approved design. These property projects have not been covered by previous purchasing restrictions.
"Since January, many commercially titled projects have already been suspended from sale. This was already a warning to buyers. The sales volume of commercially-title projects is now low and buyers are being careful about them. I think sales of these projects will just fade out," said Lu Wenxi, senior analyst of Centaline Property.
Developer giant Shanghai Greenland Group has so far been fined 88 million yuan (12.8 million US dollars) for violating commercial-use regulations in a project in Pujiang Town in Minhang District, according to local media reports. It was one of four developments that have recently been punished for breaching the regulations.