China's home market 'out of control' as prices climb further

Shanghai

CHINA'S home prices grew at the fastest pace in eight months in April after curbs failed to stem buyer enthusiasm.

New home prices in 70 cities, excluding state-subsidised housing, rose 0.48 per cent last month from March, when they gained 0.41 per cent, National Bureau of Statistics figures showed on Monday. Values in the secondary market, which faces less government intervention, climbed 0.4 per cent, the same pace as a month earlier.

Buyer euphoria is persisting, with investors using real estate as a hedge against global inflation. That has prompted authorities to issue a drumbeat of statements designed to cool down price expectations.

Year-to-date residential sales have more than doubled from the same period in 2019 in cities including Shenzhen, Shanghai, Hangzhou and Nanjing, according to China Real Estate Information Corp.

President Xi Jinping in late April repeated his mantra that houses are "for living in, not for speculation" when chairing a meeting of China's 25-member Politburo, the Communist Party's top ruling body. Last week, policy makers signalled they may revive efforts to introduce a long-delayed national real estate tax via a trial.

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"The home market has remained sort of out of control, the wider the curbs, the more resilient the market becomes," Yang Kewei, a research director at China Real Estate Information, said before the figures were released. "That's why a trial of levy of home ownership may come sooner than expected, as a stronger show of policy strength."

Price gains accelerated across large and small cities as developers ramped up project launches during a traditionally fast season for sales to recoup cash. Property sales surged 35 per cent from a year earlier, a separate data release showed.

Price growth was particularly acute in tiertwo regional centres, given their relatively looser restrictions and higher demand under further relaxing of centuries-old hukou residential permits.

Cities that saw housing values climb one per cent or more from March include Wuhan, the former epicentre of the coronavirus pandemic, and Haikou, the provincial hub of tropical Hainan. BLOOMBERG