BEIJING, April 17 (Reuters) – China’s new home prices rose in March at the fastest pace in 21 months, official data showed on Saturday, suggesting the market is breaking out of stagnation amid strong stimulus , although uncertainty remains about the strength of the impulse.
New home prices in China rose 0.5% month-on-month in March, after rising 0.3% in February, marking the fastest pace since June 2021 and the third straight monthly rise, according to Reuters calculations based on in data from the Chinese National Statistics Office.
Prices in annual terms showed the smallest fall since June 2022, with a decrease of 0.8% in March after a decrease of 1.2% in February, the eleventh month of decreases in annual terms.
“The house price index shows a stabilization and recovery trend, which fully indicates that the overall housing sector has broken out of last year’s low,” said Yan Yuejin, an analyst at E-house China Research and Development Institution, based in Shanghai.
Strong home sales in March fueled an improvement in home prices, Yan said.
China’s real estate sector, which accounts for about a quarter of the country’s economy, suffered a severe blow last year, when crackdowns on high debt levels for property developers led to a financing crisis that halted construction of new Projects. Some buyers boycotted mortgage payments, further weakening consumer confidence in a scenario of harsh restrictions due to COVID-19.
Home sales have rebounded in the country’s major cities over the past month, as demand pent up after the abrupt repeal of pandemic restrictions in December.
Among the 70 cities surveyed by the National Statistics Office, 64 saw a rebound in new home prices on a monthly basis, the most cities since May 2019 and up from 55 in February.
The increase in housing prices was widespread at all levels of cities, which extended their month-on-month increases.
However, analysts point out that it is still too early to tell if the nascent real estate recovery will continue, due to uncertainty about consumer confidence.
China is to publish March real estate sales and investment data on Tuesday, along with first-quarter economic activity and gross domestic product (GDP) data.
(1 dollar = 6.8690 Chinese yuan renminbi)
(Reporting by Liangping Gao, Qiaoyi Li, and Ryan Woo; Editing by Christian Schmollinger and Simon Cameron-Moore; Editing in Spanish by Darío Fernández)
