Third-tier cities still struggling
Home prices rose rapidly in the nation's major cities in March but the pace of growth may slow as purchase requirements get tighter, experts said.
Of the 70 large and medium-sized cities monitored, prices of new homes climbed month-on-month in 62, up from 47 the previous month, the National Bureau of Statistics (NBS) said Monday.
On a year-on-year basis, 40 cities recorded increases, compared with 32 in February, the NBS said.
Prices of new homes rose most in Shenzhen, South China's Guangdong Province, surging 62.5 percent year-on-year, followed by Shanghai (30.5 percent) and Nanjing, capital of East China's Jiangsu Province (17.8 percent).
Prices in Dandong in Northeast China's Liaoning Province fared worst, falling 3.8 percent.
Among first-tier cities, Shenzhen had the most unbalanced housing price-to-income ratio of 23, followed by Shanghai at 14, Xia Dan, an analyst at Bank of Communications, told the Global Times on Monday.
"Home prices in Shenzhen will continue to rise in the long run as the city lacks land and real properties," said Yan Yuejin, a research director at the Shanghai-based E-house China R&D Institute.
Compared with first-tier cities, home prices in second-tier cities rose faster, as "tight purchase policies including restrictions on real estate investment and non-residents' purchases are driving buyers to second-tier cities," said Xia.
In a report sent to the Global Times Monday, Yan said that home prices in Xiamen in East China's Fujian Province and Hefei in East China's Anhui Province saw fast growth.
"However, excessively rapid growth may reduce available credit, similar to the real estate market adjustment several years ago, in turn leading to a drop in real estate transactions," Yan commented.
Rising home prices have pushed up land prices.
In the first quarter of 2016, the average land price of 105 major cities across the country was 3,668 yuan ($566.34) per square meter, up 0.96 percent month-to-month and up 3.55 percent on a yearly basis.
While the housing market was strong in large and medium-sized cities, most third-tier cities face overcapacity and falling prices.
"Third- and fourth-tier cities have real estate inventories, but conditions may be uneven in different regions. Those in central and western regions have low transaction volumes. They will find it hard to recover," Yan said.