BEIJING (Reuters) - China's new home prices market remained firm in March, extending a 35-month rising streak, as the government worked to support demand from first-time buyers and upgraders and despite persistent curbs to dampen speculative demand.
Average new home prices in China's 70 major cities rose 0.4 percent in March from the previous month, up from an 0.2 percent growth in February, Reuters calculated from National Bureau of Statistics (NBS) data published on Wednesday.
On a yearly basis, new home prices increased 4.9 percent in March, slowing from February's 5.2 percent increase, partly due to a high base effect as policymakers rushed to impose a flurry of fresh tightening measures in late March last year.
The majority of the 70 cities surveyed by the NBS still reported monthly price increases for new homes. Fifty-five cities reported higher prices in March, up from February's 44.
"Today's data shows there is still significant upwards price pressure," Yan Yujin, an analyst with Shanghai-based E-house China R&D Institute said. "It it possible some cities will release more tightening measures."
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China's property market has soared since 2016, giving a major boost to the economy but also raising concerns about bubbles. Prices have slowly levelled off and even softened in tier-1 cities following government measures to rein in speculative investment.
While more than 100 cities have introduced some measures to cool home prices, analysts still expect moderate price appreciation in the country's vast number of smaller centres where regulations are less restrictive.
Price gains reported by smaller provincial capitals expanded by 0.3 percentage points in March from that in February. Meanwhile, prices in top-tier cities also increased 0.1 percent in March from February, reversing a fall in the previous month, the NBS said in a statement along with the data.
New home prices on average for the country are expected to rise faster than previously thought in 2018 on falling inventories and still robust demand from tier-3 and tier-4 cities, according to a Reuters poll last month.
China posted its fastest property investment growth in three years in the first quarter, driven by a surge in land values and as developers grew more confident about the policy outlook, even as sales slowed and existing curbs hit transactions.
New household loans, mainly mortgages, totalled 580 billion yuan in March. They made up 52 percent of total new yuan loans, versus 33 percent in February.
Chinese property developers are also reporting firm results. Last week, China's second-largest property developer Vanke reported total contract sales of 154.26 billion yuan in the first quarter, up from 150.3 billion made in the same period last year.
Higher borrowing costs pose a risk for the sector as they will potentially dampen demand, although mortgage rates remain low compared with historic levels, analysts say.
(Reporting by Yawen Chen and Ryan Woo; Additional Reporting by Zhang Min; Editing by Sam Holmes)
Disclaimer: No Business Standard Journalist was involved in creation of this content
