New home prices in China grow at solid pace

Impact of reserve ratio cuts being felt in the mainland

Average new home prices in China’s 70 major cities inched up 0.6 percent in the month to April, according to Reuters, citing data released Thursday by the National Bureau of Statistics (NBS).

The figures in April marked the 48th consecutive month of price increases in the mainland. Around 67 cities reported monthly price increases for new homes, up from 65 in March.

Home prices rose 10.7 percent in the year to April, surpassing the growth of 10.6 percent in March.

“The impact of a series of cuts in banks’ required reserve ratio (RRR) on the property market is showing,” Zhang Dawei, an analyst with property consultancy Centaline, told Reuters.

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Five RRR cuts have been announced in China over the past year. A targeted reduction earlier this month focused on small and medium-sized banks.

The tier-one cities of Beijing, Shanghai, Shenzhen and Guangzhou collectively posted a gain of 0.6 percent between March and April, up from a 0.2 percent increase in the month to March.

Tier-2 cities, on the other hand, collectively increased 0.8 percent month-on-month in April, up from a 0.6 percent gain in the previous month.

Home prices in small tier-3 cities inched forward 0.5 percent on a monthly basis in April, down from 0.7 percent in March.