Beijing

CHINA'S moves to ease mortgage restrictions and cut interest rates are bearing fruit in the nation's smaller cities, where home prices have staged a recovery. Now comes the bigger challenge: Clearing a supply glut to spur investment by developers.

Lower borrowing costs are helping a residential market recovery spread from the economic hubs such as Shanghai and Shenzhen to smaller and less-prosperous cities. New-home prices rose in September from August in more than half of the 70 major cities monitored by the government for the first time in 17 months. Yet, a construction boom over the past two years has led to 424.7 million square metres of unsold homes languishing nationwide as of Sept 30.