China's property market continued to show signs of recovery in March, with most of the surveyed major cities reporting month-on-month rises in new home prices.
Of 70 large and medium-sized cities surveyed in March, 62 saw new home prices increase month on month, up from 47 the previous month, the National Bureau of Statistics (NBS) said Monday. Meanwhile, eight cities reported month-on-month declines, down from 15 in February, according to NBS data.
On a yearly basis, 40 cities posted new-home price increases and 29 reported falls in March, compared with 32 and 37 in February.
New-home prices soared 62.5 percent year on year in the southern city of Shenzhen, the sharpest increase last month among all the major cities, followed by Shanghai, Nanjing and Beijing, where prices surged 30.5 percent, 17.8 percent and 17.6 percent year on year, respectively. The northeastern city of Dandong registered the steepest price decline of 3.8 percent over the previous year.
Prices for existing homes also continued to pick up in March, with 54 cities reporting higher month-on-month prices and 13 reporting lower prices. The property sector has been a significant supporting force for China's economic growth.
Prolonged weakness in this sector and growth deceleration in property investment are believed to be a major risk to the Chinese economy and the main factors behind the overall sluggish demand.
China's housing market started to recover in the second half of 2015 after cooling for more than a year, boosted by government support measures, including interest rate cuts and lower deposit requirements. In February, taxes on some property transactions were slashed and further reductions to the minimum downpayments for eligible first- and second-time home buyers were announced.
"Although China's metropolises reported sharp price increases, markets in many smaller cities remained stable," said Liu Jianwei, a senior NBS statistician.
The weakness in lower-tier cities was mainly caused by the persistent supply glut after substantial investment over the years following the 2008 global financial crisis. There was about 735.2 million square meters of finished but unsold properties across China at the end of March, down some 4.2 million square meters from the end of February, according to the NBS.
On an annual basis, however, the inventory was still 13.1 percent higher than the same period in 2015. China included property inventory reduction as one of its five priorities for 2016.
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