New home prices rise an average 1.06 pct in China

House prices in China rose for the 10th straight month in March as sentiment among buyers continued to pick up.

The average price of new residential properties across 100 major cities rose 1.06 percent from a month earlier to 9,998 yuan (US$1,592) per square meter, accelerating from February's 0.83 percent increase, the China Index Academy said yesterday.

Fifty-one of the 84 cities that posted gains saw an increase of more than 1 percent. In February, 74 cities recorded month-on-month growth, with 41 seeing a rise of more than 1 percent.

Zhanjiang in Guangdong Province led last month's gainers with a 3.66 percent rise.

Sixteen cities posted price drops, with three shedding more than 1 percent. Wenzhou in Zhejiang Province retreated 3.65 percent from February, the most among decliners.

"Panic seen across the country over the past month as home seekers rushed to buy existing houses in order to avoid extra transaction cost before a 20 percent capital gains tax is implemented also helped boost sentiment in the new home market," the academy said.

"Meanwhile, more real estate developers trimmed or cancelled their price discounts as the traditional high season for property purchase is arriving."

In the country's 10 largest cities, the average price for a new home climbed 1.25 percent from February to 16,803 yuan per square meter, with Beijing, Guangzhou and Shenzhen all seeing gains of more than 2 percent. Shanghai prices rose 0.45 percent.

The State Council rolled out an array of measures on March 1 in its latest bid to tighten control over the property market amid expectations of rising house prices, one of which was the 20 percent capital gains tax on home transactions compared to the previous tax of 1 to 2 percent of the final price. This made a huge impact on the market, triggering both panic selling and buying.

In Shanghai, data released yesterday by Shanghai Deovolente Realty Co showed that new home sales soared to a 40-month high in March, triggered by the tax.

The purchases of new residential properties, excluding government-funded affordable housing, saw a jump of 180 percent from February to 1.54 million square meters, the highest monthly volume registered since December in 2009.

Average prices, meanwhile, fell 7 percent from a month earlier to 22,896 yuan per square meter, as 72 percent of the houses were located beyond the city's Outer Ring Road, a decrease of 8 percentage points from that of February, Deovolente's figures showed.

On the supply side, 1.33 million square meters of new houses were released to the local market last month, the highest monthly release since January 2011.