Home prices in China increased for the ninth consecutive month in May, as smaller cities resisted government efforts to curb the risk of a property bubble.
SouFun Holdings Ltd reported that home prices increased 0.5 percent month-on-month in May. Of 100 cities monitored by SouFun, 76 cities experienced a residential price increase, with average home values nationwide surging to 8,819 yuan psm (S$1,676 psm).
Last month, the government said it plans to continue property curbs after increasing the minimum down payment for second-home purchases this year and levying residential property taxes in Chongqing and Shanghai.
In addition, the central bank has increased interest rates four times and raised the reserve requirements of banks eight times since October.
“Home-price growth remained at a steady pace and was higher than we expected,” said Johnson Hu, a Hong Kong-based property analyst at CIMB-GK Securities Research Pte.
“Hot money went to the periphery of big cities, where policies are not so strict. Prices there will hold up pretty well this year.”
Among the 100 cities tracked by Soufun, Urumqi registered the largest increase in home prices at three percent, while Dezhou posted the biggest decrease of 1.6 percent in April.
Home prices in rose gained 0.2 percent, while Shanghai home values rose 0.3 percent.
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