Just as the government’s icy property curbs blasting at the nation’s hottest markets appear to have taken hold, the forest fire in China’s housing sector is now raging through the smaller tier-three and tier-four cities.
The price of new homes outside the government’s watchlist of 15 most sought after cities climbed 0.9% on average during the month of April, up from 0.8% and 0.4% in the preceding two months, respectively, according the the latest 70-city home price data from the National Bureau of Statistics.
These monthly gains translate to approximately a 10% annualized pace of home price appreciation, which is likely to have crossed outside the accepted boundary of a “stable housing market.”
A total of 42 out of these 55 small to medium cities saw prices gaining 0.5% or faster last month and for a large majority of them, the pace of the climb was bigger than in March.
In stark contrast, prices in most of the 15 selected hot housing markets calmed in April. On average, the group saw only a marginal 0.1% pick up in new home prices last month after March’s surprise turnaround that ultimately compelled local officials to pull the trigger on tighter curbs.
The one exception is Guangzhou, the capital and most populous city of Guangdong province, with prices there continuing to fly high. Its home prices rose 1.4% in April after surging 2.5% during March.
The 15 select tier-one and hot spot tier-two cities are Nanjing, Fuzhou, Shanghai, Hefei, Tianjin, Shenzhen, Chengdu, Hangzhou, Xiamen, Zhengzhou, Wuxi, Beijing, Wuhan, Jinan and Guangzhou.