Guangzhou new home prices jump 14pc from April

New home prices increased 14 per cent in Guangzhou last month from a month earlier, the fastest among 10 key mainland cities tracked by the SCMP-Creda index.

The index, a collaboration between the South China Morning Post and the mainland consultancy China Real Estate Data Academy, does not cover the vast number of smaller cities on the mainland, where prices are suffering the most as the rush by local governments to sell land in the past few years resulted in a housing glut.

"We will soon see home prices fall 15 per cent or even more in third- and fourth-tier cities," said Chen Sheng, Creda's dean and a property industry veteran. "But overall prices in top cities such as Beijing and Shanghai will remain stable."

Shanghai overtook Beijing last month as the most expensive city on the mainland, with the average new home priced at 27,651 yuan (HK$34,800) per square metre.

The price in Chengdu, in Sichuan province, remained the cheapest of the 10 cities, at 7,192 yuan per square metre.

In year-on-year terms, new home prices rose the fastest in Guangzhou, by 21 per cent last month, while they declined the quickest in Hangzhou, Zhejiang province, by 16 per cent, the index showed.

The combined area of new homes sold in the 10 cities edged up to 9.5 million square metres from April's 9 million square metres.

Shenzhen remained the city with the lowest volume, 260,000 square metres, while Chengdu's transactions totalled 2.2 million square metres, the highest among the 10 cities.

The 10 cities also include Chongqing, Wuhan in Hubei province and Nanjing in Jiangsu province.