China’s April home prices spiked at the fastest pace in 8 months

The National Bureau of Statistics (NBS) indicated that prices increased in 62 of the 70 cities tracked 

According to South China Morning Post, China’s home prices soared at the fastest pace in eight months to the highest level in five and a half years, as buyers disregard the government’s cooling measures to bring down the property bubble.  

The average price of new homes across 70 major cities rose 4.8 percent in April from 2020, revealed the National Bureau of Statistics (NBS).  

Prices rose in 62 of the 70 cities tracked by the NBS, piloted by shot-up listings in the huge city of Chongqing of 30 million people.

Such price increases have put pressure on the government to implement more draconian measures to cool the market, as housing affordability has been one of the government’s hot political issues this year.  

Yan Yuejin, director of the Shanghai-based E-house China Research and Development Institute, said: “The 100th anniversary of the founding of the Communist Party elevates the control of home prices to a top priority. We will see more tough measures to cool down the market this year, particularly on home speculators.” 

The central government emphasised the unaffordability of houses as a “difficulty” in Premier Li Keqiang’s annual work report.  

“We will keep the prices of land and housing, as well as market expectations, stable,” Li said in the report to China’s legislature in Beijing. “We will address prominent housing issues in large cities [and] make every effort to address the housing difficulties faced by our people, especially new urban residents, and young people.” 

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In efforts to prevent housing speculation, the government has brought back the idea of instituting a property tax.  

“Shenzhen and Shanghai, once named by the regulators, have started to see housing market cool off slightly while speculations emerge in other major cities not yet underscored by top officials and prices there started to increase fast,” Yan said. 

Shenzhen is showing some initial signs of success in containing rampant house prices after 13 rounds of cooling measures since last July. Average new home prices increased 0.5 percent in April. While lived-in home prices were stable, the first month without an increase in 20 months.