Home prices in China’s first-tier and selected second-tier cities will continue to rise at a slower pace this year while they will increase in second-tier cities generally, said a latest report from the Chinese Academy of Social Sciences.

Third and fourth-tier cities are expected to see home prices drop slowly and then stabilize amid a shrinking inventory, the CASS said yesterday in its annual real estate blue paper.

“Fueled by the country’s generally easier macro-economic policies, property prices in China will head northward this year,” the report said. “However, over the longer term, it is possible that real estate prices will decrease again, starting in the second half of 2017, if China’s macro-economy keeps expanding at a slower pace.”

The CASS said down payment requirement in third and fourth-tier cities may be further reduced to 15 percent from 20 percent now while deposit for second homes will be cut correspondingly to relieve pressure from a huge housing inventory in those cities. Moreover, further adjustment in some real estate-related tax policies may happen this year, the CASS said.

Investment in real estate development may rebound this year while land prices across the country will generally keep rising at a stable pace, the report said.

A separate report released earlier by the China Index Academy, which tracks home prices in 100 Chinese cities, said the average price of a new home rose 1.45 percent from a month earlier to 11,467 yuan (US$1,763) per square meter in April, slowing from a 1.9 percent gain in March.

(Source: ShanghaiDaily  Author: Cao Qian)