BEIJING • New home prices in China rose at the fastest pace in seven months last month and price rises spread to more cities, data showed yesterday, as property demand remained red-hot despite government efforts to cool the market.
Separate official data also showed property investment remained elevated for the first three months of the year, and sales soared even as the authorities further tightened property curbs in dozens of major cities.
Average new home prices in 70 major cities grew 0.5 per cent in March from a month earlier, the quickest pace since last August and up slightly from a 0.4 per cent gain in February, according to Reuters calculations based on National Bureau of Statistics (NBS) data.
New home prices rose 4.6 per cent year on year last month, the biggest annual gain since last September, up from 4.3 per cent in February.
Real estate, a key pillar of China's economy, has bounced back quickly from the Covid-19 crisis as the economy recovered from its fallout. But a consistent rise in house prices in big cities, which is now spilling over into smaller ones, has raised concerns about financial risk and overheating.
The NBS data showed 62 cities reported monthly gains, up from 56 in February. Tier-2 cities led monthly price growth, with new home prices in those cities rising an average of 0.5 per cent month on month in March, the NBS said in a statement accompanying the data.
Big cities such as Shanghai and Shenzhen, which have seen population influx and rampant property speculation, imposed stringent regulations early this year, leading property demand to spill over into some smaller cities.
But China's four Tier-1 cities still contributed most of the gains in the resale home market, with monthly prices growing an average of 1 per cent last month in those cities.
"The data showed 86 per cent of the 70 cities saw housing prices rising in March, the most on record," said Mr Zhang Dawei, chief analyst at property agency Centaline.
The authorities have tightened existing curbs on the property market this year and rolled out new measures including greater scrutiny of illegal flows of funds and fixed price references for secondary market financing.
The Housing Ministry has gone on inspection tours and talked to 13 cities since early this year, telling localities to take more creative steps to clamp down on speculation.
"The core reason for the recent heat-up since end-2020 is credit policy, especially the abuse of business loans in the property market," said Mr Zhang.
China's real estate investment rose 25.6 per cent in the first quarter of the year, from a low base a year earlier, separate NBS data showed yesterday.
It was up 15.9 per cent from the same period in 2019, before the pandemic struck.
Property sales by floor area surged 63.8 per cent year on year in the January-March period, and were up 20.7 per cent from the first three months in 2019. Analysts noted that home sales by value in March was the highest for the same period on record.
New construction starts rose 28.2 per cent year on year in the first three months of this year, while funds raised by developers rose 41.4 per cent.
REUTERS
