(ATF) China’s housing market climbed again in May, tracking the country’s economic recovery from the coronavirus downturn.
Home prices in 70 major cities saw mild month-on-month increases, according to data from the National Bureau of Statistics (NBS).
New home prices in four first-tier cities – Beijing, Shanghai, Shenzhen and Guangzhou – rose by 0.7% in May, 0.5 percentage points higher than the month earlier.
Second-tier cities saw a 0.6% rise new home prices, up 0.1 percentage points from the previous month, and third-tier cities witnessed a 0.7% climb in new home prices, compared with a 0.6% increase reported in April.
Trillions of yuan have been pumped into credit markets to encourage enterprises and individuals to borrowing their way out of the downturn, which shrank Chinese quarterly GDP for the first time in generations. Much of that money has gone into buying property, even after authorities, fearing bubbles in the sector, had sought to quell speculation.
Last month, prices of resold housing in first-tier cities edged up 1.1% month-on-month, unchanged from the increase seen in April.
In second- and third-tier cities, prices of resold housing increased 0.4% and 0.3 % from the previous month, respectively.
Demand for housing was unleashed with the resumption of production and relaxation of living orders after the outbreak was contained after two months of lockdown, said Kong Peng, a senior NBS statistician.
Monday's data also showed that commercial property sales totalled 487.03 million square meters in the first five months, down 12.3% year-on-year but seven percentage points narrower than the January-April decline.
China's investment in property development inched down 0.3% year on year in the first five months, narrowing from the 3.3% decline during the January-April period.
Wen Bin, chief analyst at China Minsheng Bank, said the real estate market in some major cities witnessed a delayed pick-up in housing supply and demand. With continuous improvement in major indicators including commercial housing sales, Wen predicted that the country's property investment growth would return to positive territory.
The overall impact of COVID-19 on the property market is almost over and market turnover for the year is still likely to reach the peak level seen in 2019, said Zhang Dawei, chief analyst with real estate agency Centaline Property.
China has reiterated the principle that "houses are for living in, not speculation." While curbing housing price speculation, the country will also implement city-specific policies in the sector, according to this year's government work report.