China’s home sales continued to grow in April, signaling that tightening measures designed to stem a home-price surge in some large cities have yet to slow the market’s upward momentum.
New-home sales gained 63.5 percent to 793.7 billion yuan ($122 billion) last month from a year earlier, according to Bloomberg calculations based on data the National Bureau of Statistics released Saturday. The increase followed a 71 percent surge in the previous month.
Some Chinese cities unveiled tightening measures starting in mid-March, to rein in rapid gains in house prices and a home-buying frenzy that followed government stimulus measures. Among the cities to impose curbs were Shanghai and Shenzhen, where new-home prices soared 25 percent and 62 percent in March from a year earlier, respectively. Suzhou, Nanjing and Langfang have also introduced tightening measures.
One indicator that the pace of increases may be slowing comes from the moderating credit expansion in April, according to Tom Orlik, an economist for Bloomberg Intelligence. The nation’s banks extended new loans of 555.6 billion yuan last month, down from the median forecast of 800 billion yuan in a Bloomberg survey.
Increased credit is the “most critical driver” of the housing market rally so far, Alan Jin, a Hong-Kong based analyst at Mizuho Securities Asia Ltd., wrote in a May 12 note.
Property development investment growth was 7.2 percent in the first four months of this year, 1 percentage point higher than the pace in the first quarter, according to Saturday’s data. Developers bought 6.5 percent less land in the period, and new construction starts increased 21.4 percent.
— With assistance by Emma Dong