China’s Home Prices Climb Further as Undersupply Outweighs Curbs

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China’s home prices grew at the fastest pace in nine months in May as buyers competed for dwindling properties, even as authorities introduced more targeted curbs on the market.

New home prices in 70 cities, excluding state-subsidized housing, rose 0.52% last month from April, when then gained 0.48%, National Bureau of Statistics figures showed Thursday. However, values in the secondary market climbed 0.3%, the least this year.

Buyer enthusiasm has persisted despite stricter measures imposed in some large cities this year, as available housing stock continued to fall. As a traditional busy season for sales wrapped up, supply halved on average in the four biggest cities and plummeted more than 30% in lower-tier areas last month, according to China Real Estate Information Corp.

Housing inventory shrank in more than 70% of cities, worsening an undersupply. Last month, policy makers signaled they may revive efforts to trial a long-delayed national real estate tax, a stronger signal of their willingness to rein in prices. The banking regulator also began to curb issuance of securities backed by residential mortgages, a move that may curtail new home loans and slow buyer demand.

©2021 Bloomberg L.P.

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