China home prices up in April in fifth consecutive monthly rise: Survey

BEIJING (AFP) - Chinese home prices picked up in April in their fifth consecutive monthly rise, an independent survey showed.

The cost of a new home in 100 major cities rose 5.3 per cent year-on-year to an average 10,098 yuan (S$2,023) per square metre, said the China Index Academy.

Home prices increased 3.9 percent in March and 2.5 per cent in February.

On a monthly basis, prices rose one percent in April from March, the group said in a statement, continuing a run of increases for the 11th month in a row.

"Looking ahead, cities where housing prices are rising quickly face the risk of even tighter regulatory policies," said the China Index Academy, which is owned by SouFun Holdings, China's largest real estate website operator.

Property prices are a sensitive issue in China and authorities have sought for the past three years to control their rise.

New rules issued in March to rein in prices included a capital gains tax of 20 per cent on profits that owners earn from selling residential property.

Homeowners were previously taxed just one or two per cent of the sale price.

Major Chinese cities, including the capital Beijing and commercial hub of Shanghai, have begun to announce detailed policies on how they plan to implement the central government's edict.

Chinese couples have flocked to divorce to evade the new tax, through a loophole which allows couples with two properties who separate and put each house into one person's name to then sell them tax-free in certain cases.

Other measures to contain prices have included restrictions on purchases of second and third homes, higher minimum down payments and taxes in some cities on multiple and non-locally owned homes.