China's home prices grow fastest in 2 years

Shanghai (above) and Shenzhen remained the country's two hottest housing markets, but there are signs recent tightening measures are beginning to temper demand in those cities.
Shanghai (above) and Shenzhen remained the country's two hottest housing markets, but there are signs recent tightening measures are beginning to temper demand in those cities.PHOTO: REUTERS

Gains in regional centres in April show wider rebound beyond cities

BEIJING • 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 a 4.9 per cent rise in March, according to Reuters' calculations based on data released by the National Bureau of Statistics (NBS) yesterday.

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," NBS senior statistician Liu Jianwei 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 have also been a source of angst for policymakers who have publicly warned against excessive lending.

Shenzhen and Shanghai were still the 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.

REUTERS

A version of this article appeared in the print edition of The Straits Times on May 19, 2016, with the headline 'China's home prices grow fastest in 2 years'. Print Edition | Subscribe