Home price in control becomes big trouble again

Home price in control becomes big trouble again

What we see market we should first observe the home building and construction industry. At present,China’s home prices fell in a record 46 of 70 cities tracked by the government in April from a year earlier as officials pledged to keep restrictions on property purchases that have sapped buyer demand.
The eastern city of Wenzhou led declines with a 12.3 percent slump in values from a year earlier, while Beijing dropped 1 percent and Shanghai prices declined 1.3 percent, according to data released by the statistics bureau today.
The Housing Ministry said yesterday China will steadfastly continue curbs on the housing market and won’t flip-flop on its policies, Shanghai Securities Journal reported. This followed a pledge by the State Council, or Cabinet, last month to stick with existing property controls implemented over the past two years, where the government tightened down payments and mortgages, and imposed restrictions on the number of homes families can buy.
“The general price trend as a result of developers cutting prices and regulatory environment is continuing this month,” Chris Brooke, chief executive officer for Greater China at CBRE Group Inc. (CBG), said in a Bloomberg Television interview from Beijing. “The objective is to remove the speculative element from the market.”
The drop in April home prices compares with 37 cities that registered a decrease in March, according to today’s data. The bureau switched from a national average to individual figures for the 70 cities at the start of last year.
While the government maintained its housing curbs, it helped eased funding by lenders. The central bank lowered the amount of cash that banks must set aside as reserves three times since November to boost liquidity and spur loan growth.
 “The government’s policy focus of helping first-home buyers is not going to revive the property market but only mitigate some of the pain,” said Zhang Zhiwei, Hong Kong-based chief China economist at Nomura Holdings Inc.
The eastern city of Yangzhou in Jiangsu province will offer new buyers subsidies of as much as 0.6 percent of the total value of a home, Xinhua Daily reported on May 8, citing the local finance bureau. Industrial & Commercial Bank of China Ltd. suspended a 15 percent discount on mortgage lending for first-time home buyers nationwide, the official Xinhua News Agency reported on May 5. So, as being such case, market may not be so optimistic.The suspension was made to address tight liquidity and deposit instability and other Chinese banks may follow suit, Sophie Jiang, a Hong Kong-based banking analyst at Religare Capital Markets, said in a May 7 report.