China’s first-tier new home prices rise for third month as measures take hold

New home prices in China’s first-tier cities rose 0.2 per cent in May, extending a three-month rebound after nine months of losses and a flat February, pointing to a gradual recovery in confidence as stabilisation measures take hold, analysts have said. Compared with the previous month, May home prices edged up 0.2 per cent in Shanghai and Guangzhou, gained 0.4 per cent in Shenzhen, and slipped 0.2 per cent in Beijing, according to data from the National Bureau of Statistics (NBS) released on Tuesday. Across 70 large and medium-sized cities tracked nationwide, 16 recorded month-on-month increases, up from 14 in April, the NBS said. “More than one-fifth of the 70 cities posted home price gains, marking a positive indicator,” said Yan Yuejin, vice-president of Shanghai-based property consultancy E-house China Research and Development Institute. “These cities generally enjoy sound population and economic fundamentals, robust industrial growth, and strong housing demand from young people and home upgraders.” Sales of new commercial buildings reached 2.94 trillion yuan (US$435 billion) in the first five months, down 13.5 per cent year on year. Residential property sales alone fell 14.1 per cent year on year, the NBS said. Prices in the four first-tier cities fell 1.7 per cent on average in May from a year earlier, narrowing the decline by 0.4 percentage points from April. Shanghai rose 3.2 per cent, while Beijing, Guangzhou and Shenzhen declined 2.1 per cent, 3.3 per cent and 4.5 per cent, respectively. Across 70 large and medium-sized cities tracked nationwide, 16 recorded month-on-month increases, up from 14 in April, according to official data.