China March new home prices rise at fastest pace in 21 months

BEIJING: China's new home prices rose in March at the fastest pace in 21 months, official data showed on Saturday, as continued government policy support helped prop up demand amid a broader push for an economic recovery.

New home prices in March edged up 0.5% month-on-month after a 0.3% rise in February, marking the fastest pace since June 2021 and the third consecutive monthly rise, according to Reuters calculations based on National Bureau of Statistics (NBS) data.

Prices fell 0.8% year-on-year, down on an annual basis for the 11th straight month. Prices were down 1.2% in February in annual terms.

The property sector, accounting for roughly a quarter of China's economy, was hit hard last year as a regulatory crackdown on developers' high debt levels snowballed into a financing crunch, stalling construction on housing projects. Some buyers boycotted mortgage repayments, further weakening consumer sentiment amid tough COVID restrictions.

Major cities have seen a rebound in home sales over the past month, as pent-up demand was unleashed after China abruptly rolled back COVID curbs in December.

Household loans, mostly mortgages, jumped to 1.24 trillion yuan ($180.52 billion) in March from 208.1 billion yuan in February, with medium- to long-term household loans rising to 634.8 billion yuan from 86.3 billion yuan in February, according to Reuters' calculations based on central bank data.

Earlier in April, the central bank released a quarterly survey of urban depositors that showed 17.5% of respondents have plans to buy a home during the next three months, up from 16% in the previous quarterly survey.

Analysts say it is still too early to tell whether the nascent property recovery will be sustained, due to uncertainty over consumer confidence.

First- and second-tier cities have posted a more noticeable rebound than smaller ones, although an array of third- and fourth-tier cities have unveiled favourable lending policies to bolster home purchases.

China will release property sales and investment data for March on Tuesday, along with economic activity data and first quarter gross domestic product (GDP).

($1 = 6.8690 Chinese yuan renminbi)