China’s April dwelling costs preserve momentum, smaller cities lead progress

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© Reuters. FILE PHOTO: Residential and office buildings can be seen in Beijing

BEIJING (Reuters) – Chinese new home prices rose again in April, driven by high demand in smaller coastal towns as the strength of the property market in large centers waned due to tighter restrictions, a private survey found on Saturday.

New property prices in 100 cities rose 0.23% in April from the previous month, up from 0.2% in March, according to the China Index Academy, one of the country’s largest independent real estate research firms.

The strength was mainly borne by Tier 2 and Tier 3 cities in the eastern and southern coastal regions. Monthly growth in prices for new homes in 10 major cities, including Beijing and Shanghai, cooled slightly over the past month, data showed as waves of severe curbs removed some of the heat from the market.

“In the Yangtze River Delta and the Pearl River Delta, as core cities put tighter restrictions in place, demand is now flowing into nearby Tier 3 and Tier 4 cities with large population bases and promising industries,” said Cao Jingjing, Research Director of the China Index Academy.

Used house price growth, a market that is more opaque and less regulated than the new home sector, accelerated to 0.5% in April from the previous month, from 0.44% in March.

That month, authorities in a dozen cities stepped up their campaign to drive speculators out of the real estate market. They took more targeted measures such as capping developer-set sales prices and preventing some real estate agencies from setting excessively high second-hand home prices.

China’s leaders also vowed on Friday to increase the supply of rental and affordable social housing and to prevent speculation in various real estate markets, including houses in school districts.

Separately, another survey by Chinese real estate data provider Zhuge House Hunter found that average home rental price growth in China accelerated at the fastest pace since February 2020 in April, driven by increasing demand in prime cities as the country’s economy steadily expanded recovered from the coronavirus shock last year.

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