New home prices in China’s biggest cities record first rise in 10 months

Mainland China’s first-tier home prices edged up 0.2 per cent in March, rising after nine months of losses and no change in February, but it is too soon to declare the property market stable without sustained improvement in homebuying demand, according to analysts.

Compared with a month earlier, March home prices were flat in Beijing, rose 0.3 per cent in Shanghai and Guangzhou, and gained 0.2 per cent in Shenzhen, according to data released by the National Bureau of Statistics (NBS) on Thursday.

Among the 70 large and medium-sized cities tracked nationwide, new home prices recorded month-on-month increases in 14, up from 10 in February, the NBS said.

“We believe it remains premature to conclude that this signals a broader stabilisation in China’s housing market,” said Edward Chan, a Greater China analyst at S&P Global Ratings. “It will be important to observe whether the price improvements are sustainable.”

The fact that the property market had not worsened could be considered a positive outcome, with stable but “not overwhelming” recovery and determined policy support, said Griffin Chan, an analyst at Citi Research, in a report on Thursday.

“Most investors do not anticipate a substantial turnaround and need more conviction for stabilising prices in key cities” before increasing investments in the sector, Chan said. “Given sales recovery started in the first quarter and continued in April, we [believe that] sector correction in March offered a good opportunity to add property names in April.”

South China Morning Post