Policymakers have prioritised stabilising an overheated market ahead of a Communist Party reshuffle later this year.The NBS said price growth for new homes in China’s 15 most overheated cities – mainly provincial capitals – has remained “basically stable” from the previous month as city-based control measures continued to take effect.
Prices for new homes in China’s biggest cities such as Beijing and Shanghai stopped climbing in May on a monthly basis, while prices fell 0.6 percent in Shenzhen, the fastest seen in three months.
Central bank data published last Wednesday showed Chinese banks extended more credit than expected in May, with home loans expanding even as policymakers struggled to rein in riskier borrowing without impeding economic growth.
Household loans, mostly mortgages, rose to 610.6 billion yuan in May from 571 billion yuan in April, accounting for 55 percent of total new loans last month, up from 52 percent in April, the data showed.
Investors, banned from the hottest markets, are increasingly looking inland, driving up prices in more remote, smaller cities with fewer buying restrictions, leading to a surprise pick-up in May sales.
Sales by value in smaller cities have risen 30 percent so far in 2017 compared to a year ago, said Sam Xie, head of research at property services provider CBRE China.
But economists say new tightening measures introduced since mid-March have started taking some heat out of the market.
Annual growth in China’s real estate investment slowed in May, the first fall-off in three months, taking a toll on new developments as new construction starts almost halved from the previous month, official data showed last Wednesday.
(Reporting by Yawen Chen and Ryan Woo; Editing by Eric Meijer)