China home prices rise faster in May as smaller cities join rally
By Clare Jim
HONG KONG (Reuters) - Sizzling home price rises in China's biggest cities showed signs of easing in May but sharp gains appeared to be spreading to smaller cities, making policymakers' job harder as they look to support the faltering economy without inflating bubbles.
The recovery in China's property market since late last year has been a rare bright spot in the world's second-largest economy, which has been slowing amid weak demand at home and abroad, cooling investment and excess industrial capacity.
Average new home prices in 70 major cities climbed 6.9 percent last month from a year ago, accelerating from April's 6.2 percent rise, according to Reuters calculations based on data from the National Statistics Bureau (NBS) on Saturday.
The NBS data showed 50 of the 70 major cities it tracks saw year-on-year price gains, up from 46 in April.
"The average (price) growth of new homes in first-tier cities started to narrow, while it continued to widen in second- and third-tier," said Liu Jianwei, a senior NBS statistician.
The southern city of Shenzhen remained the top performer, with prices surging 53.2 percent from a year earlier, slower than the 62.4 percent rise in April.
But on a month-on-month basis, prices were up just 0.5 percent after April's 2.3 percent rise, evidence that property cooling measures introduced by some big cities recently are starting to bite.
Shenzhen and Shanghai have tightened downpayment requirements for second homes and raised the eligibility bar for non-residents to purchase properties. Continued...