Housing sector recovery broadens amid supportive policies
New home prices in 70 Chinese major cities continued to improve in May, mainly driven by price hikes in the first-tier cities, according to the data released by the National Bureau of Statistics (NBS) Thursday. The average growth rate of housing prices in 70 major cities in May was 0.7 percentage points higher than that in April, according to the NBS. Twenty cities saw their new home prices rise month-on-month in May, up from 18 cities in April, the data showed.
The housing market has warmed up in the first-tier cities such as Beijing, Shanghai and Shenzhen, Zhang Dawei, an analyst from Beijing-based Centaline Property Research Center, said in a research note sent to the Global Times Thursday.
However, home prices in third-tier cities continued to slump in May, Zhang noted.
Chinese authorities announced a batch of supportive policies for the housing market on March 30, including reduction in the amount of down payment and relaxation of loan conditions. The central bank also cut benchmark interest rates on May 11.
"The housing market in first-tier cities has continued to benefit from these policies", Zhang said. "For example in Beijing, the number of new home transactions in May increased by 40 percent from the previous month."
As the housing sector has been affected by the overall economic downturn since January, "these new policies stimulated the real estate industry leading to a pick up in the number of home transactions," Li Zhanjun, an analyst from Shanghai-based housing market research firm E-house China R&D Institute, told the Global Times on Thursday.
In fact, the volume of home transactions is a better indicator of the housing market's recovery compared to price rise, Li noted. "Many cities still have high inventories," he said.
The volume of home transactions in first and second-tier cities was up 41 and 13.4 percent, respectively, in May, though the volume in third and fourth-tier cities slightly declined, according to the data compiled by the Centaline Property in June.
Among the major first-tier cities that recorded rise in new home prices in May, Shenzhen saw the biggest increase with a 6.7 percent growth, according to the NBS data.
