New home prices in China rose at their fastest pace in five months in May, compl...
BEIJING - New home prices in China rose at their fastest pace in five months in May, complicating government efforts to keep frothy housing markets under control as it rolls out more stimulus for the slowing economy.
That marked the 49th straight month of price gains. Sixty-seven of the total 70 cities surveyed by the NBS reported higher prices in May, the same as April.Beijing has repeatedly urged local governments to keep runaway prices under control, but a recent easing in credit conditions, pent-up demand for housing, and an implicit government mandate to prevent a collapse have kept the market surprisingly resilient.
“If the market becomes overheated policymakers will definitely rush to regulate it,” Zhang Dawei, a Beijing-based analyst of property consultancy Centaline, wrote in a note. Some developers have sought to promote sales by cutting prices, which has raised alarm. The Chinese city of Enshi tried to stabilize house prices by urging developers to halt drastic price cuts, threatening punishing measures unless such “wrong behaviors” stopped.China’s home price growth has slowed significantly since the second half of 2017 due to intensive local curbs on speculative investments.
The average interest rate on first home loans continued to drop in May to the lowest level since 2018, according to a market report cited by state-backed Economic Information Daily. Prices in China’s four top-tier cities - Beijing, Shanghai, Guangzhou and Shenzhen - saw slower growth in May, increasing 0.3% versus 0.6% growth in the previous month.
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