Consistent with recent sales reports from major real estate companies and agencies, the official April housing price index also showed further downward adjustment.

 

　　Data from the National Bureau of Statistics shows that in April, among the 70 large and medium-sized cities, the number of cities with new commercial residential prices unchanged or declining month-on-month were 18 and 8 respectively, an increase of 8 and 4 compared to March; for second-hand housing prices, 35 cities saw month-on-month price stagnation (13 unchanged and 22 declining), accounting for 50%.

 

　　Analysts point out that although no major changes that could trigger a turning point have yet appeared, the risks in the real estate industry are undoubtedly intensifying, and its negative impact on China's economy will test the decision-making of both central and local governments.

 

　　Price growth continues to narrow, more cities see stagnation. "In April, housing prices in the 70 large and medium-sized cities generally showed stable and slight increases, but the growth rate narrowed." Liu Jianwei, senior statistician of the Department of Urban Surveys at the National Bureau of Statistics, analyzed that the comprehensive average month-on-month increase in new commercial residential prices in the 70 cities was 0.1% in April, 0.2 percentage points narrower than in March; the comprehensive average month-on-month increase in second-hand residential prices was 0.2%, the same as in March.

 

　　Specifically, in April, the number of cities with month-on-month increases in new home prices was 44, while 18 cities remained unchanged and 8 declined, namely Hangzhou, Ningbo, Wenzhou, Jinhua, Anqing, Ganzhou, Wuxi, and Huizhou. This means that 26 cities have seen housing prices stop rising. In terms of month-on-month price changes, the highest increase was 0.4%, and the lowest was a decrease of 0.7%. The month-on-month increases in new home prices in the four first-tier cities also narrowed: Shanghai had the highest at 0.3%, Guangzhou the lowest at 0.1%, and Beijing and Shenzhen both at 0.2%.

 

　　It is worth noting that among the cities with month-on-month declines in new home prices, four are from Zhejiang, and Jiangsu, Jiangxi, and Anhui each account for one. In other words, except for Huizhou in south-central Guangdong, all cities with month-on-month declines in new home prices in April are from East China. Among them, Hangzhou, which took the lead in launching price cuts this year, led the 70 cities with a month-on-month decline of 0.7%.

 

　　In terms of year-on-year, in April, among the 70 large and medium-sized cities, 1 city saw a price decline and 69 saw increases. The only city with a year-on-year decline was still Wenzhou, while Shanghai continued to lead the year-on-year increase list. However, compared with the second half of last year when year-on-year increases in first-tier cities all exceeded 20%, the trend of narrowing year-on-year increases this year has been very obvious. In April, the year-on-year increases in new home prices in Beijing, Guangzhou, and Shenzhen all dropped to 11.2%, not far from entering single digits.

 

　　For second-hand homes, compared with March, among the 70 large and medium-sized cities, 22 saw price declines, 13 remained unchanged, and 35 saw increases. In terms of month-on-month price changes, the highest increase was 0.7%, and the lowest was a decrease of 0.8%. The number of cities with stagnant prices rose to 35, accounting for half. Year-on-year, 2 cities saw price declines, 1 remained unchanged, and 67 saw increases.

 

　　"In the absence of strong measures, the property market will be difficult to recover significantly in the short term." Huang Hetao, deputy director of the Market Research Department of Century 21 Shanghai Region, said that in April, the scope of cities with stagnant housing prices expanded significantly, and the growth rate further contracted. Although there are positive factors in the recent property market (many local governments have issued documents to rescue the market, and the central bank has clearly stated support for first-home loans), the former is unlikely to fully lift purchase restrictions, and the latter is also unlikely to introduce large-scale stimulus policies.

 

　　Property market risks accumulate, economic outlook worrisome. Under tight credit and wait-and-see sentiment, the property market has continued to slow this year, with sluggish transactions and declining investment, which has dragged down economic growth, and the market has also seen concerns about a possible real estate crash.

 

　　Song Li, deputy director of the Institute of Economic Research at the Academy of Macroeconomic Research of the National Development and Reform Commission, previously said that real estate risks are exaggerated. He believes that the current real estate market is in a stage of equilibrium, and since urbanization is far from complete and rigid demand has not been fully released, housing prices are only undergoing a stage adjustment and will not see a major trend decline.

 

　　But from the current situation, regional adjustments seem inevitable. Zhang Dawei, director of the Market Research Department of Centaline Property, believes that the possibility of accelerated market adjustment is increasing, especially in third- and fourth-tier cities, which are likely to fall into overall downturn.

 

　　Zhu Haibin, chief China economist at JPMorgan Chase, expects that a strong rebound in the property market this year is unlikely, but the extent of the decline may be much smaller than the market fears. "The year-on-year growth rate of housing prices reached a turning point in January this year and may return to zero or around -2% by the end of the year. The possibility of a sharp plunge in housing prices is very small." He further pointed out that although China's growth stabilization measures this year are basically similar to the 2013 version, growth is unlikely to repeat the rebound in the second half of last year. Full-year GDP growth is expected to be 7.2%, and real estate is the biggest macro risk.

 

　　"We have not yet seen any major changes in 'factors that could trigger a turning point', but risks are undoubtedly increasing." Wang Tao, UBS special chief economist, and Hu Zhipeng, economist, pointed out that policymakers may take a series of measures to mitigate the risks that real estate poses to the real economy, including further increasing infrastructure investment, accelerating the relaxation of household registration thresholds in third- and fourth-tier cities, and allowing some local governments to relax regulatory policies. "If real estate activity declines significantly, policymakers may even change the current policy stance, allowing accelerated credit expansion and lowering interest rates to support asset prices and bail out the real economy."