New-home price growth in China accelerated slightly in April, providing a bright spot for a slowing economy being buffeted by an intensifying trade war.
The average value of new homes, excluding government-subsidized housing, in 70 major cities, rose 0.62% last month, according to data released by the statistics bureau Thursday. That follows a 0.61% gain in March.
The jump in home prices adds to signs the rebound in the housing market is taking hold. New-home sales by value surged 18.1% last month, the fastest pace since July, data released Wednesday showed. That stood in contrast to industrial output and retail sales, which slowed more than economists forecast.
That leaves the property sector “as the single most important driver of the Chinese economy,” said Larry Hu, head of Chinese economics at Macquarie Securities Ltd.
However, that poses a dilemma for policymakers. Lifting curbs risks stoking a buying frenzy that pushes prices out of reach of many people, while leaving restrictions in place could tank one of the few sectors propping up the economy, making it harder for the government to reach its GDP growth target.
The increase was largely driven by big cities, with prices in tier-1 cities rising the most in four months. Price growth in tier-3 cities was the slowest in 13 months amid reduced support for shanty-town renovation projects.