The average house price of Kylin Villa in Jiangning district, Nanjing, rise from 12,500/㎡ to 13,300/㎡ in two months. Image: soufang.com
New home prices keep a 10th consecutive month of rising in China in May, with fast growth in second-tier cities and slow increase in first-tier cities.
Statistics from China Real Estate Index System (CREIS), a research firm, showed that the prices of new homes in the 100 biggest Chinese cities increased at an average 10.34 % year-on-year to 11,662 yuan (HK$13,757) per square metre last month, the fastest growth since August.
On month-on-month level, prices in May picked up 1.7 %, building on a 1.45 % gain in April. 74 cities saw prices rise from the previous month, compared with 71 in February.
“Growth in first-tier cities has been stable, rose faster in second-tier cities but slowed in third-tier cities,” CREIS said in a report.
Shenzhen, China’s tech hub and the southern city adjacent to Hong Kong, remained the most expensive city to buy property, but average new home prices there expanded at a slower pace of 2 % in May — to 51,361 yuan per square metre. That compares with a 2.84 % increase in April. Prices for new homes in the city have jumped 59 % in the past 12 months.
Shanghai was the second priciest, with the cost of purchasing a house surging 20.7 % year-on-year to 40,144 yuan per square metre. New home prices in Beijing rose 13.6 % on average.
China’s southern port city of Xiamen and Hefei, a city close to Shanghai, saw the greatest price increases last month, rising 5.9 % and 5.8 % respectively.
The rising market sentiment, increased salaries and limited new home supply pushed up home prices in second-tier cities, according to a staff from CLSA’s regional head of property research.
Analysts expect that urban centres in second-tier cities will continue to lead nationwide price growth in the coming months.
In the latest move, Nanjing became the second Chinese city to set a ceiling on prices for public land auctions, as a way to rein in the market.