China's new home prices edge up in March as more cities report gains (updated)

Vanke Overseas Investment Holding

18/04/2018 03:16

(Adds details, background, analyst quote)
    * March new home prices +0.4 pct m/m vs +0.2 pct in Feb
    * Yearly growth +4.9 pct while Feb was +5.2 pct
    * Number of cities reporting price gains rose
    * Top tier cities prices rebounded
    * Smaller cities extended higher gains

    BEIJING, April 18 (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."
    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.  urn:newsml:reuters.com:*:nL3N1RC2UB
    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. urn:newsml:reuters.com:*:nL3N1RS03D
    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.  urn:newsml:reuters.com:*:nL3N1RQ3P6
    Chinese property developers are also reporting firm results.
Last week, China's second-largest property developer Vanke
 1036.HK  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.  urn:newsml:reuters.com:*:nL3N1HD32B
    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.
    

    <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
China's property market    http://tmsnrt.rs/2BSc9Bx
    ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
 (Reporting by Yawen Chen and Ryan Woo; Additional Reporting by
Zhang Min; Editing by Sam Holmes)
 ((yawen.chen@thomsonreuters.com; +86 10 6627 1207; Reuters
Messaging: yawen.chen.thomsonreuters.com@reuters.net))