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China's housing market remains stable in April with prices edging up

Updated: May 18,2020 11:18 AM    Xinhua

BEIJING — China continued to see a generally stable housing market in April, with home prices in 70 major cities showing milder month-on-month increases, official data showed on May 18.

New home prices in four first-tier cities — Beijing, Shanghai, Shenzhen and Guangzhou — showed month-on-month growth of 0.2 percent in April, unchanged from a month earlier, according to data from the National Bureau of Statistics (NBS).

The country's second-tier cities saw a month-on-month increase of 0.5 percent in new home prices, up 0.2 percentage points from the previous month, while third-tier cities witnessed a month-on-month rise of 0.6 percent in new home prices, compared with a 0.2-percent increase reported in March.

Prices of previously owned houses in first-tier cities climbed 1.1 percent from March, while prices in second-tier and third-tier cities edged up 0.4 percent and 0.2 percent month-on-month, respectively.

According to Kong Peng, a senior NBS statistician, the housing demand, which had been curbed by the novel coronavirus epidemic, increased further in April.

China's housing market remained generally stable as authorities across the country stuck to the principle that "houses are for living in, not speculation," according to Kong.

Earlier this month, the NBS data showed that the sales area of China's commercial housing plunged 19.3 percent year-on-year to 339.73 million square meters during the first four months. The decline was seven percentage points less than in the first quarter.

"The housing market saw a recovery in transaction volume and a lesser impact from the epidemic in April," said Zhang Dawei, a chief analyst with real estate agency Centaline Property.

Currently, market transactions have exceeded 80 to 90 percent of the volume in the same period last year, he said.

The release of pent-up demand, a cut in benchmark lending rates and the loosening of household registration systems in some second- and third-tier cities all gave the market a shot in the arm, Zhang added.

The central bank lowered the five-year loan prime rate by 10 basis points in April, which helped shore up the market.

Zhang said he expects the market will continue to recover this month as well as in June with the transaction volume of the whole year almost on a par with that in 2019.

There was a divergent trend in the property market as cities across the country introduced different measures to stabilize the sector, he said.

Data showed that previously owned housing prices rose most dramatically in Chengdu, Shenyang and Shenzhen last month.

A report issued by the E-house China R&D Institute showed that transactions will not likely increase in most of the cities as central authorities still have a tight grip on the market, despite more housing supply in the next few months.

On the demand side, the epidemic has caused huge shocks to the world economy and will likely weigh on household incomes. This may dampen purchase demand to some extent, according to the report.