Business

China’s April home prices maintain momentum, smaller cities lead growth

© Reuters. FILE PHOTO: Residential and office buildings are seen in Beijing

BEIJING (Reuters) – Chinese new home prices rose again in April, fuelled by hot demand in smaller coastal cities as housing market strength in major centres tapered off due to tighter restrictions, a private survey showed on Saturday.

New home prices in 100 cities rose 0.23% in April from a month earlier, up marginally from 0.2% in March, according to data from China Index Academy, one of the country’s largest independent real estate research firms.

The strength was mainly contributed by tier-2 and 3 cities in the eastern and southern coastal regions. Monthly new home price growth in 10 major cities including Beijing and Shanghai cooled slightly last month, the data showed, as waves of stringent curbs took some heat out of the market.

“In Yangtze River Delta and Pearl River Delta, as core cities instituted tighter restrictions, the demand is now flowing into nearby tier-3 and 4 cities with a large population base and promising industries,” said China Index Academy Research Director Cao Jingjing.

Price growth in second-hand homes, a market more opaque and less regulated than the new home sector, quickened to 0.5% in April from previous month, compared with 0.44% in March.

The month saw authorities in a dozen of cities intensifying their campaign to drive speculators out of the property market, taking more targeted steps like capping sales prices set by developers and preventing some real estate agencies from setting excessively high second-hand home prices.

China’s top leaders on Friday also vowed to boost the supply of rental housing and affordable public housing, and prevent speculation in various property markets including school district homes.

Separately, another survey by Chinese property data provider Zhuge House Hunter showed growth in China’s average home rental prices quickened in April at the fastest pace since February 2020, driven by rising demand in first-tier cities as the country’s economy steadily recovered from the coronavirus shock last year.

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