Urban home price gains accelerate in May

New home prices in all-tier Chinese cities climbed at a faster pace in May amid the unleashing of pent-up demand which built up during the coronavirus outbreak, according to data released on Monday by the National Bureau of Statistics.

In the four gateway cities, new home prices rose by 0.7 percent from a month ago, accelerating from April's 0.2 percent gain. Shanghai led with an increase of 0.8 percent, while Beijing, Guangzhou and Shenzhen recorded month-over-month increases of 0.5 percent, 0.3 percent and 0.6 percent, respectively, according to the bureau, which monitors housing prices in 70 major Chinese cities.

In the pre-occupied housing market, prices in the four top-tier cities jumped 1.1 percent on average, unchanged from a month ago. They rose in Beijing and Shenzhen by 1.8 percent and 1.6 percent, while Shanghai and Guangzhou witnessed milder gains of 0.6 percent and 0.4 percent.

In 31 second-tier cities and 35 third-tier cities, new home prices rose by an average of 0.6 percent and 0.7 percent, both up by 0.1 percentage point from April. Prices of existing homes in second-tier cities advanced 0.4 percent, unchanged from April, and gained 0.3 percent in third-tier cities, accelerating from April's 0.2 percent growth.

"The country's residential property market remained generally stable last month with insignificant price increases being recorded along with a continuous, orderly resumption of work and production in major cities across the country," said Kong Peng, chief statistician at the bureau.

Nationwide, new home prices in Yinchuan in northwest Ningxia Hui Autonomous Region jumped 2.1 percent in May, the largest month-on-month increase, bureau data showed.

On a year-on-year basis, prices of new homes added 2.9 percent, 5.4 percent and 4.8 percent, respectively, in first-, second- and third-tier cities, compared with growth of 2.9 percent, 5.6 percent and 5.1 percent recorded a month earlier. In the pre-occupied market, they rose 4.1 percent, 2 percent and 2.1 percent in first-, second- and third-tier cities, compared with 3 percent, 2.2 percent and 2.4 percent, respectively, in April.

The improving momentum came with a nationwide recovery in sales.

Between January and May, more than 4.12 trillion yuan (US$580.1 billion) worth of new homes, excluding government-subsidized affordable housing, were sold around the country, a year-on-year drop of 8.4 percent but continuously improving from the 16.5 percent decrease registered in the first four months, according to a separate report released by the bureau.

By area, new homes sold during the five-month period fell 11.8 percent to 429.41 million square meters, also narrowing from a year-over-year drop of 18.7 percent recorded in the first four months of 2020.

Investment in residential property development during the first five months exceeded 3.37 trillion yuan, flat from the same period a year earlier. That also improved from a 2.8 percent decrease recorded during the first four months.

On the inventory side, newly built homes available for sale as of the end of May stood at 243.7 million square meters, a year-on-year increase of 1.9 percent. That compared with 248 million square meters by the end of April, according to the NBS.