China’s February home prices record their fastest monthly growth pace as supply shortage stir buyers’ fear of missing out

China’s home prices grew at the fastest pace in six months in February, as a lower supply of projects during a holiday season added to a fear of missing out among buyers.

New home prices in 70 major cities, excluding state-subsidised housing, rose 0.36 per cent last month from January, when they gained 0.28 per cent, the National Bureau of Statistics figures showed Monday. Values in the secondary market, which faces less government intervention, climbed 0.34 per cent, almost the same pace as January.

Red-hot sentiment has persisted in the face of stricter curbs imposed in some large cities. More prospective homebuyers stayed in cities where they work last month – a period that included the Lunar New Year holiday – due to a renewed surge of coronavirus cases, spurring home purchases.

In 29 key cities monitored by China Real Estate Information Corp., new-home sales more than tripled in February from a year earlier, when the health crisis seized up the economy. New-home supply in those cities plunged 63 per cent by area in February from January, it said.

The rush to real estate in the biggest hubs pushed China’s top policymakers to pledge to solve the housing problem at its annual legislative session earlier this month. “We will keep the prices of land and housing as well as market expectations stable,” Premier Li Keqiang said in a speech.

Policymakers have unveiled a slew of novel policies to fine-tune the industry this year, including a new mechanism on banks’ real estate lending and fresh bidding rules designed to curb land costs. In January, Shanghai and Shenzhen further cracked down on housing speculation via fake divorces, and cities including Hangzhou requested additional requirements when purchasing a second residence.