Home prices fall for 5th month

Home prices in China fell for the fifth straight month in January as tightening measures continued to take effect, according to research released yesterday by the China Index Academy.

Prices fell an average of 0.18 percent from December to 8,793 yuan (US$1,393) per square meter in 100 major cities across the country.

In September, prices dropped for the first time in a year. From then to the end of 2011, prices fell by between 0.03 percent and 0.28 percent in the 100 cities.

Last month, prices fell in 60 cities, unchanged from December, the academy said, with 15 seeing a decrease of more than 1 percent, compared to 12 in the previous month.

The average cost of homes in the 10 largest cities, which include Shanghai, Beijing, Guangzhou, Shenzhen and Chongqing, fell 0.15 percent to 15,565 yuan per square meter in January. That followed a drop of 0.48 percent in December, 0.6 percent in November and 0.36 percent in October.

Prices in the 10 largest cities fell year on year by an average of 0.62 percent last month, the first annual drop since June 2010.

Huang Zhijian, chief analyst at Shanghai Uwin Real Estate Information Services Co, said: "Unprecedented sluggish market sentiment around the country will certainly continue for some time while home prices will go southward further over the next months with all rein-in policies remaining strictly in place.

"We expect one or two rounds of rather notable discounts will be introduced by real estate developers this year."

Earlier this week, Premier Wen Jiabao said China would improve tightening measures in the property market to fend off a speculative bubble and help prices return to reasonable levels, reiterating a government resolution to fight soaring prices.

In a separate report released yesterday by Uwin, new home sales, excluding government-funded affordable housing, fell 63 percent from a month earlier to 212,700 square meters in Shanghai in January, the second-lowest monthly transaction volume recorded in the city since 2006, when the data was first tracked.

The average price of new homes, meanwhile, climbed 1.85 percent from December to 22,541 yuan per square meter.

This was fueled by comparatively robust sales registered at a luxury apartment project in the Pudong New Area where significant discounts were offered.