China's March new home prices marginally higher – private survey

BEIJING (Reuters) – China’s new home prices rose slightly in March with demand in small cities still weak despite more local policy easing steps, and renewed COVID-19 flare-ups curbing the appetite to buy.

FILE PHOTO: Apartment blocks are pictured in Beijing, China December 16, 2017. REUTERS/Jason Lee

New home prices in 100 cities grew 0.03% on month, matching the rise in February, according to data from China Index Academy, one of the country’s largest independent real estate research firms.

China’s rattled property sector has gained some momentum in larger cities since the beginning of the year as authorities took policy action to stoke buyers’ interest and ease a liquidity crunch at some major developers.

Premier Li Keqiang early in March called for city-specific property measures to meet home buyers’ genuine demand, paving the way for local authorities to relax some curbs based on their city’s own conditions.

In March, around 20 small and medium-sized cities unveiled marginal steps to boost demand, such as allowing smaller down payments, cuts in mortgage rates, subsidies and lower curbs on purchases.

Fuzhou, the capital of the southeastern province of Fujian, this week relaxed curbs on home buying in five districts and allowed some buyers to pay down payments with housing provident funds when purchasing new homes.

But overall demand remains weak, with 53 among the 100 cities surveyed reporting declines in new home prices in March, compared with a decline in 52 cities in February, according to China Index Academy.

The real estate market woes in small cities have not improved. Prices in tier-three and tier-four cities dropped 0.02% on month, slightly widening from a 0.01% fall in February.

New home prices in tier-one cities including Shanghai, which has been fighting a major COVID outbreak since March, rose 0.03%, slowing from February’s 0.17% gain.

The pace of recovery in the real estate market was interrupted to some extent by the COVID outbreaks, with the markets in Shanghai and some other areas experiencing spikes in cases looking “dim”, according to the China Index Academy.

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