Sharp rise in home prices in China
Hong Kong, May 18
China’s home prices posted their fastest growth in two years in April, with gains in regional centres indicating a broader recovery in the country’s housing market beyond the major cities.
However, while Shanghai and Shenzhen remained the country’s two hottest housing markets, there are signs recent tightening measures are beginning to temper demand in those cities.
Average new home prices in 70 cities climbed 6.2 per cent in April from a year ago, up from March’s 4.9 per cent rise, according to Reuters calculations based on data released by the National Bureau of Statistics (NBS) today.
That was the quickest year-on-year increase since April 2014, while 46 of 70 major cities tracked by the NBS saw annual price gains, increasing from 40 in March.
“(Price) growth in first and second-tier cities continued to accelerate, while third-tier cities reversed declines to post growth,” Liu Jianwei, a senior statistician at the NBS, said in a statement.
The recovery in China’s property market since late last year has been a rare bright spot in the world’s second largest economy, which has been slowing amid internal restructuring and weak global demand.
However, rising debt levels in the country have also been a source of angst for policymakers who have publicly warned against excessive lending.
Shenzhen and Shanghai were still two top performers, with home prices rising 62.4 per cent and 28 per cent from a year ago, respectively.
Compared with March, however, price gains slowed, suggesting recent tightening policies might be gaining traction, with Shenzhen growth easing to 2.3 per cent from 3.7 per cent, while Shanghai growth slowed to 3.1 per cent from 3.6 per cent.
Both cities tightened downpayment requirements for second homes and raised the eligibility bar for non-residents in late March.
“A change was observed in growth trend among cities ... secondary homes in Shenzhen even posted a month-on-month drop, while growth in some of second-tier cities accelerated and exceeded first tiers,” Liu said.
Realtors said home sales in Shenzhen and Shanghai have plunged as much as 60 per cent after the new policies.
China’s housing market bottomed out in the second half of the year on a series of government support measures, although most smaller cities haven’t been able to clear their oversupply issues, prompting many local authorities to push for even more stimulus.
Property professionals in some lower-tier cities said prices have been recovering, helped by the slew of support measures.