BEIJING (BLOOMBERG) - China's home prices rose at the fastest pace in seven months in May, as the property market continues its rapid recovery from the coronavirus shutdowns.

New-home prices in 70 major cities, excluding state-subsidised housing, increased 0.49 per cent last month, National Bureau of Statistics data released Monday (June 15) showed. That's up from a 0.42 per cent gain in April.

Values in the secondary market, which is largely free from government intervention, gained 0.24 per cent, the fastest pace in seven months.

Interest in property is rekindling as China returns to business-as-usual, with prices rising across small, medium and large cities. And with the central bank opening the taps on credit to support the economy, housing is again seen as a safe place to store wealth.

Discounts, more support from local governments and a surge in supply since the virus was brought under control have also boosted demand.

Residential sales last month exceeded pre-virus levels in almost half of the 28 cities monitored by China Real Estate Information Corp, and hit a two-year high in cities such as Shanghai and Hangzhou.

Even so, analysts are split on the outlook for the rest of the year.

Mr John Lam, head of China real estate research at UBS Group AG, expects prices to hold broadly stable on a more positive funding environment for developers, which reduces the need to cut prices to boost cashflow.

For Macquarie Securities Ltd's Larry Hu, "property is the wild card this year."

While price momentum is holding up well in larger cities, values in smaller cities are under more pressure, he said.