China home-price gains spread as demand spur

Bloomberg

China’s home-price gains accelerated last month as the nation’s economic hubs such as Beijing, Shanghai and Shenzhen continued to lead the way amid surging liquidity that underpinned demand.
New-home prices excluding government-subsidized housing climbed in 62 cities, compared with 47 in February, among the 70 cities tracked by the government, the National Bureau of Statistics said on Monday. They dropped in eight cities, compared with 15 a month earlier.
The government moved away from a one-size-fits-all property stimulus last month to allow more tailored approaches at the local level, after loosening measures sparked frenzied buying in top hubs. With no more stimulus from the central government to boost smaller markets, and local authorities moving in to take the steam out of overheating markets such as Shanghai and Shenzhen, the recovery’s sustainability is coming into question. Given price growth in the past months and tightening measures, “any further increases in first-tier cities going forward should be mild, if any,” Jeffrey Gao, a Hong Kong-based analyst at Nomura Holdings Inc., said by phone.

Xiamen, Shenzhen
Out of the 62 cities with price gains last month, 55 had faster increases than in February, according to the statistics bureau. The average new-home price rose 0.85 percent in March, up from 0.38 percent in the previous month, according to Bloomberg calculations based on government data.
Gains were led by a 5.4 percent jump in the port city of Xiamen in southern Fujian province, followed by a 4.6 percent increase in Hefei, capital of eastern province Anhui.
Prices in the southern business hub of Shenzhen rose 3.7 percent from a month earlier and 63 percent from the same period last year, the biggest year-on-year increase among the 70 cities. Those in Shanghai and Beijing climbed 4.3 percent and 3.3 percent,
respectively.
“Although the vast majority of cities saw price gains month on month, the difference in the gains remains relatively large across cities,” the statistics bureau said in a statement released with the data. The fastest price increases were mainly in first- and some second-tier places, with the less economically significant third-tier ones remaining “relatively stable.”

Sales Jump
Prices in March gained in 60 cities among the 100 tracked by SouFun Holdings Ltd., the owner of China’s biggest property website, compared with gains in 61 the previous month. Average new-home prices roses 1.9 percent from February, when they advanced 0.6 percent.
The value of homes sold jumped 71 percent in March to 869.8 billion yuan ($134.1 billion) in the biggest year-on-year increase since at least 2015, according to Bloomberg calculations based on statistics bureau data released last week.
Investment in real estate development climbed 6.2 percent in the first quarter from a year earlier, extending the increase from the first two months when it reversed a two-year falling streak.