House prices in major cities see mild increase

Govt cooling measures are expected to stay

“The housing market remained stable in January with major cities reporting a bigger growth in new home prices on a monthly basis.”

Sheng Guoqing

BEIJING: 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, according to experts.

Average new home prices in 70 major cities rose by 0.3% on a monthly basis and by 3.7% 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% on a monthly basis, with Guangzhou witnessing a price growth of 1%. Prices rose by 0.6% in Shanghai, 0.5% in Beijing and by 0.3% in Shenzhen.

Compared with a year ago, the four top-tier cities saw a 4.2% 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% on a monthly basis, and by 4.1% on a yearly basis, while the figures were 0.2% and 3.3%, 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% growth in existing home prices. Shenzhen saw the largest month-onmonth increase of 1.7% in transactions among the four mega cities, followed by Guangzhou with 1.4%, Shanghai with 1.3%, and Beijing with 0.9%.

On a yearly basis, the four cities saw a 9.6% 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% on a monthly basis in the 18 key cities monitored by the Beike Research Institute, while the four biggest Chinese cities reported a 29% 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% from a month ago, and by 2.5% on a yearly basis. The 35 third-tier cities saw existing home prices rise by 0.3% on a monthly basis, and by 1.5% 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.