Home prices in major cities see mild rise

Home prices in major Chinese mainland cities saw mild growth in January, with first-tier cities taking the lead on robust demand, and government cooling measures are expected to stay, experts said.

Average new home prices in 70 major cities rose by 0.3 percent on a monthly basis and by 3.7 percent on a yearly basis, the National Bureau of Statistics said on Tuesday. Among the 70 cities, 53 saw a growth in new home prices in January, 11 more than in December.

"The housing market remained stable in January with major cities reporting a bigger growth in new home prices on a monthly basis," said Sheng Guoqing, chief statistician of the NBS.

New home prices in the four top-tier cities rose by 0.6 percent on a monthly basis, with Guangzhou witnessing a price growth of 1 percent. Prices rose by 0.6 percent in Shanghai, 0.5 percent in Beijing and by 0.3 percent in Shenzhen.

Compared to a year ago, the four top-tier cities saw a 4.2 percent growth in their new home prices, up 0.3 percentage point on a monthly basis, according to the NBS.

First-tier cities outperformed smaller cities in new home price growth, as demand surged due to concerns about tightening credit options, said Yan Yuejin, director of the Shanghai-based E-house China Research and Development Institution.

In the 31 second-tier cities monitored by the NBS, prices rose by 0.4 percent on a monthly basis, and by 4.1 percent on a yearly basis, while the figures were 0.2 percent and 3.3 percent, respectively, for the 35 third-tier cities.

In the pre-owned home market, 49 out of the 70 cities saw a growth in prices, 11 more than the previous month.

Compared with last December, the top-tier cities saw a 1.3 percent growth in existing home prices. Shenzhen saw the largest month-on-month increase of 1.7 percent in transactions among the four mega cities, followed by Guangzhou with 1.4 percent, Shanghai with 1.3 percent, and Beijing with 0.9 percent. On a yearly basis, the four cities saw a 9.6 percent growth in existing home prices.

"Expanded transaction volume is a key factor in driving pre-owned home price increases in key Chinese cities," said Xu Xiaole, chief market analyst with the Beike Research Institute.

In January, trading of existing homes rose by 23 percent on a monthly basis in the 18 key cities monitored by the Beike Research Institute, while the four biggest Chinese cities reported a 29 percent growth.

Zhang Dawei, chief analyst at Centaline Property Agency Ltd, said the rapid growth in used home prices in top-tier cities was largely due to the school-district home transactions, as well as the scarcity of new homes in these cities.

Top-tier cities, home to high-quality schools and universities, are seen as ideal destinations for students who used to study abroad but decided to return to China to resume education due to the COVID-19 pandemic, said Zhang.

Used home prices in the 31 second-tier cities, mostly provincial capitals, rose by 0.4 percent from a month ago, and by 2.5 percent on a yearly basis.

The 35 third-tier cities saw existing home prices rise by 0.3 percent on a monthly basis, and by 1.5 percent from the same period a year ago.

Experts said more cities are expected to announce cooling measures to keep home prices stable in the next few months.