China new home prices increase in March led by smaller cities
Analyst expects property demand to increase in bigger cities this year but not prices as government keeps it in check
New home prices, excluding government-subsidised housing, increased in 55 of the 70 cities tracked in March, compared with 44 in February, the National Bureau of Statistics said. New home prices dropped in 10 cities, down from 16 in February.
New home prices in Beijing, Shanghai and Guangzhou all rose in March, the first time in months, though the increase was minimal. Prices in Shenzhen, however, dropped 0.1 per cent.
“The government’s stringent property curbs, including direct price control, have actually added to the new home short supply in top cities and incentivised people to grab a home, underlining the paradox of government control,” said Joe Zhou, head of China research at JLL.
Even as price momentum picked up, China’s residential property sales by area slowed considerably, to 2.6 per cent year on year growth in March, compared to the 11 per cent a year earlier.