New houses prices in 100 cities edged higher for the first time in four months in May, according to independent research, fueled by a string of policy-easing measures and a flood of investors pulling their cash out of the turbulent stock market.
Overall prices rose 0.45 percent month-on-month to 10,569 yuan ($1,700) per square meter, after a 0.01 percent contraction in April, said the China Index Academy, the research unit of SouFun Holdings Ltd.
Apart from a slight uptick in January, the new-prices index has been declining for the past 12 months. On year-on-year basis, however, May prices contracted 3.73 percent.
Shenzhen led the price rises with a 2.68 percent jump, followed closely by Shanghai with a 2.32 percent gain. Beijing rose 0.18 percent.
Prices rose in 48 of the 100 cities, compared with 39 in April. Nine of the country's 10 major cities monitored by SouFun saw rises, with Hangzhou the exception.
Stimulus policies made since the end of March, including greater support for second-home buying, lowered interest rates, and reserve requirement ratio cuts, were instrumental in driving prices higher, it said.
More than 100 cities have now adjusted their housing provident fund policies, also making it easier to buy homes.
In Beijing, particularly, homebuyers have responded with more purchases. In May, sales of pre-owned properties registered online surged 150 percent over a year ago to 15,204 units, reported Homelink Real Estate Agency, the city's largest broker.
Analysts said the dramatic new home sales in Shenzhen had been prompted by panic buying.
Three new projects there were sold out in just hours one weekend, and prices in some hotspots jumped nearly 40 percent in a week, Chinese media reported.
But the steady upward valuations of first-tier city properties was in contrast with what has been a volatile stock market recently, which experts said is forcing more investors to favor the former.
A sales manager at a major brokerage in Shanghai's Lujiazui financial district told China Securities Journal that during May, 70 percent of his new clients had earned huge profits on the stock market.
One of his investors, he said, had planned to buy a 6-million-yuan villa in a Shanghai suburb, but after success in the stock market he had doubled his ambition and purchased a 12-million-yuan villa in Lujiazui instead.