The arc of rising property prices is flattening if not inverting in response to the measures introduced last year to cool the market by controlling credit. Home prices in China’s 70 largest cities rose 6.4% in December year-on-year, the National Bureau of Statistics says. That was the eighth consecutive month of slowing year-on-year growth rates since April’s 12.8% peak.
December’s month-on-month rise was 0.3%. The continuing growth suggests buyers are racing to beat new residential property taxes. Chongqing is due to start a pilot scheme shortly and Shanghai has just confirmed it will follow suit.
The new taxes are unlikely to have much short term impact. Cutting off credit for new development will continue to be the policy priority. Real estate investment rose by a third in 2010 to 4.8 trillion yuan ($730 billion). Beijing will want to see that number come down in 2011 and the mix of spending favoring affordable housing in inland areas over high-end properties towards the coasts.