2015-11-17

Panic Time: Home Price Rebound Stalls in October

No wonder there's been so much talk about real estate rescues in the past few days. New home prices increased only 0.07% month-on-month in October, well below the 0.20% increase in September. The end of the rally is more evident in the number of cities seeing home price increases, 27, down from 39 a month earlier.

One reason for the drop in price increases is the cooling in first tier cities, namely Shenzhen. Shenzhen was responsible for 58% of the price increase in July and the four first-tier cities combined for 95% of the total increase that month. Things improved slightly in August. Shenzhen accounted for 42% of the increase, while first-tier cities combined for 69% of the total increase. The four first-tier were the top four gainers as well. In September, Shenzhen was still going strong at 29% of the total national increase in new home prices (its prices climbed 4% for the month). The four first tier cities were 57% of the total increase. Removing the first-tier cities from September left an increase of only 0.09% in the remaining 66 cities, an annualized rate of 2.8%.

In October, Shenzhen only saw prices rise 1.2%, less than Shanghai's 1.4%. Yet these two cities alone combined for 63% of the national price increase thanks to falling prices in the lower tiers. Add Beijing and Guangzhou into the mix and the first-tier cities accounted for 82% of the total increase in home prices. The remaining 66 cities saw prices increase 0.01%. Remove Xiamen and new home prices were down nationally.

Year over year, prices are down 1.1%.

Since 2010, average prices are up 8.6%.

March 2014: 4 cities saw declines in price mom, 10 cities were flat, 56 were up.
April: 8 cities saw declines in price mom, 18 cities were flat, 44 were up.
May: 35 cities saw declines in price mom, 20 cities were flat, 15 were up.
June: 55 cities saw declines in price mom, 7 cities were flat, 8 were up.
July: 64 cities saw declines in price mom, 4 cities were flat, 2 were up.
August: 68 cities saw declines in price mom, 1 city was flat, 1 was up.
September: 69 cities saw declines in price mom, 1 city was flat, 0 were up.
October: 69 cities saw declines in price mom, 1 city was flat, 0 were up.
November: 67 cities saw declines in price mom, 3 cities were flat, 0 were up.
December: 65 cities saw declines in price mom, 4 cities were flat, 1 was up.
January 2015: 65 cities saw declines in price mom, 3 cities were flat, 2 were up.
February: 66 cities saw declines in price mom, 2 cities were flat, 2 were up.
March: 49 cities saw declines in price mom, 9 cities were flat, 12 were up.
April: 47 cities saw declines in price mom, 5 cities were flat, 18 were up.
May: 41 cities saw declines in price mom, 9 cities were flat, 20 were up.
June: 34 cities saw declines in price mom, 9 cities were flat, 27 were up.
July: 39 cities saw declines in price mom, 10 cities were flat, 31 were up.
August: 26 cities saw declines in price mom, 9 cities were flat, 35 were up.
September: 21 cities saw declines in price mom, 10 cities were flat, 39 were up.
October: 33 cities saw declines in price mom, 10 cities were flat, 27 were up.

Existing home prices were slightly better than new home prices last month, but still rounded to a 0.07% increase. The city up/down breakdown was the same as with new home prices. The first-tier accounted for 96% of the increase in existing homes nationally. Remove them and the existing home price increase in October rounds to 0.00%. Remove Xiamen and prices fell 0.02% nationally.

The bear rally has ended.

Source: 2015年10月份70个大中城市住宅销售价格变动情况

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