Home price rises in China gained traction last month, driven mainly by first-tier cities, the National Bureau of Statistics said on Thursday, with central government policy support playing a key role.
The average new home price across 70 major cities rose 1 per cent month on month in May, accelerating from April's increase of 0.3 per cent. Twenty cities saw prices rise last month, up from April's 18. Still, 43 others suffered a fall in new home prices, down from 48 in April.
"The month-on-month price increase in May was mainly driven by tier-one cities, but polarisation among different cities is rising," senior statistician Liu Jianwei said.
Bureau data showed new home prices rose 3 per cent last month in the first-tier cities of Beijing, Shanghai, Shenzhen and Guangzhou. Prices were stable in second-tier cities, but kept falling in most third-tier cities.
The biggest price rise was 6.7 per cent in Shenzhen, while the biggest fall was 0.6 per cent in the third-tier city of Tangshan, in Hebei province.
"Such a trend of polarisation will continue in the second half," said Liu Wenchun, head of research at mainland real estate consultancy Worldunion. "That means some cities will be in heaven, while others will suffer in hell."