Buyers eyeing better deals in smaller cities
Home prices increased slightly in April compared with the previous month, according to a monthly report published on Wednesday by China's National Bureau of Statistics. The report tracks housing prices in 70 major cities in China.
The largest growth rate, a 2 percent month-on-month rise in new house prices, was seen in Dandong, a city on the border with DPRK in Northeast China's Liaoning Province. House prices there have been increasing rapidly in recent weeks, largely due to expectations of increased trade with DPRK following the April 27 Inter-Korean summit.
Hainan also saw a notable rise in prices, with a 1.9 percent monthly increase seen in two cities included in the report - Haikou, the provincial capital in the northern part of the island, and Sanya, a leading resort town in the south. The prices rose even though Hainan implemented strict restrictions on home purchases last month.
The average monthly price rise across the nation was 0.59 percent, up from 0.42 percent in March, according to analysis sent to the Global Times by Hong Kong-based Centaline property. Zhang Dawei, an analyst at Centaline, noted that April is the start of the peak season for the real estate market in China, which accounts for the slight increase.
Price rises were concentrated mostly in smaller cities, while first-tier cities saw little change or even price drops. Analysts see this as a shift in response to central government measures to cool down overheated housing markets in China's biggest cities, pushing buyers to eye cities with less restrictive policies.
"While buying restrictions have now been extended to smaller cities, more than 50 cities have set up special policies to attract human capital. These policies are being used to circumvent buying restrictions in some second- and third-tier cities, which has contributed to the growth in prices," said Zhang.
Analysts say buyers are also looking for chances in underexplored markets with more potential. "Dandong is a good example," said Yan Yuejin, research director at Shanghai-based E-house China R&D Institute.
"On the surface, its growth is due to expectations of better relations with DPRK, but it also reflects wider market sentiment in China. Buyers are looking for undervalued cities with more relaxed housing policies which also have some special concept for them," said Yan.