More Chinese cities reported house price increases in April, adding to hopes that a property downturn which is weighing heavily on the economy is beginning to bottom out.
Increases in new home prices were recorded in 18 cities last month, compared to 12 in March. Prices remained unchanged in four and dropped in the other 48, compared to eight and 50 in March, the National Bureau of Statistics, which monitors prices in 70 major cities, said yesterday.
But analysts said that any recovery will take some time given a huge inventory of unsold homes, and said the property sector remains the biggest risk to the nation's economy, which looks set for its worst year in 25 years, Reuters reported.
That will keep pressure on policy-makers to roll out more interest rate cuts and other stimulus measures later this year to boost activity, it said.
"Nationwide, prices of new homes climbed an average 0.3 percent in April as buying momentum continued to rebound amid a couple of reasons including loosening mortgage policies as well as a high-season impact," said Liu Jianwei, a senior statistician at the bureau. "However, price increases were mainly confined to first-tier and a limited number of second-tier cities whereas the rest still suffered declines."
Shenzhen continued to lead gainers among the country's four first-tier cities with a month-on-month increase of 1.8 percent, followed by Beijing, Shanghai and Guangzhou, where new home prices climbed 0.8 percent, 0.7 percent and 0.4 percent, respectively, from March.
"First-tier cities continued to have some of the lowest unsold inventory levels with relation to recent transaction volumes," said Chester Zhang, associate director at Savills China research.
"While they keep luring new business establishment or expansion supporting job creation, migration and wage growth, they are also attracting wealth from the rest of the country, which jointly supports house prices."
In the existing home market, 28 cities recorded price increases from a month earlier, compared to 12 in March. Eight cities saw prices remain flat while another 34 suffered setbacks, compared to 10 and 48, respectively, in the previous month, the bureau said.
Shenzhen was also the top gainer with a monthly increase of 2.4 percent. In Beijing, Guangzhou and Shanghai, prices rose 2.1 percent, 1 percent and 0.6 percent, respectively.
On an annual basis, however, prices dropped in all cities except Shenzhen, where a 0.7 percent annual rise was recorded for new homes and a 2.8 percent gain for existing houses.
Average new home prices in the 70 cities dropped 6.1 percent last month compared to a year ago, the same rate of decline as in March, according to Reuters.