China’s Jan new home prices quicken as mega cities heat up

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BEIJING — New home prices in China grew at a faster pace in January, driven by red-hot demand in the country’s mega cities despite several rounds of government cooling measures.

Average new home prices in 70 major cities increased 0.3% in January from a month earlier, the fastest growth since September, according to Reuters calculations based on data released by the National Bureau of Statistics. That compared with an uptick of 0.1% in December.

On a year-on-year basis, new home prices rose 3.9%, quickening from a 3.8% gain in December.

The NBS data showed 53 cities reported monthly growth, with the number rising from 42 in December.

The relentless upward price pressure was again mainly driven by bigger cities. New home prices in tier-1 cities, including Beijing, Shanghai, Guangzhou and Shenzhen, rose 0.6% from previous month, while second-hand home prices gained 1.3%, with growth in both sectors outpacing lower-tier cities.

China’s property market recovered quickly from the COVID-19 crisis last year, mostly in bigger cities. But the rebound has raised concerns about financial risks and policymakers have since then tightened screws on the funneling of funds into the sector.

Last month saw major cities including Shanghai, Shenzhen and Beijing unveiling tighter regulations to close loopholes in home transactions and contain illegal flows of funds into the sector. These steps came on top of a slew of measures it took last year, in response to a surge in residential real estate prices. (Reporting Liangping Gao, Lusha Zhang and Ryan Woo; Editing by Shri Navaratnam)