New Home prices recorded a 2.1 percent increase in April across 67 of the 70 cities in China, according to the National Bureau of Statistics. This rise comes despite the property curbs imposed by the Chinese government.
According to the data, prices in Beijing rose 1.8 percent and in Shanghai they were up 2 percent. While costs were up 2.1 percent in Guangzhou, prices in Shenzhen climbed 1.8 percent. Only two North China cities witnessed a decline in prices. In both Tangshan and Hohhot prices were down 0.1 percent. Prices in Wenzhou remained unchanged.
However, the percentage increases were slightly lesser than the increase in March. Home sales values also fell 13 percent in the month of April when compared to the figures of March. Though prices rose in April, the pace was more controlled and slower than the previous monthly increases.
The slowdown in the pace of rising prices has been attributed to the number of policies that the government has urged the local administrations to adopt. Apparently, 35 Chinese cities have issued details about adopting the stringent measures, some of which include a 20 percent capital gains tax and higher mortgage interests and down payments on second home purchases.
Experts believe that it will take some time for the measures to show their effects, at least a few more months.
"Going forward, we expect property sector policy to stabilize in the coming months and see a modest property recovery to continue. Meanwhile, the recent property tightening, including administrative price controls, may keep property prices from rising too rapidly in a few large cities," Tao Wang, an economist at UBS, said in a note to clients.
So will the government take more steps to cool the measure? The rising prices have already been posing a challenge to the government's rules.
"As long as the rate is in line with income growth, it's acceptable. It's unlikely for the government to take more actions soon, especially as the typically low season of the property market in the summer approaches," Jin, analyst based in Hong Kong said in an interview with Bloomberg.
