Property market records 'Indian summer' in April

Property prices in China remained resilient in April as easier credit, purchase policies and steps by several cities to attract talent with friendly housing policies spurred demand for new homes.

According to the National Bureau of Statistics, 67 out of the 70 major Chinese cities saw an increase in the number of newly built homes that were sold in April. Beijing, Shanghai, Guangzhou and Shenzhen, the four first-tier cities, saw growth of 0.5 percent, 0.3 percent, 1.1 percent and 0.4 percent respectively in new home sales on a monthly basis.

Prices for pre-owned property in 55 out of the 70 cities saw an improvement from the levels in March. Among the top cities, only Guangzhou saw a 0.4 percent dip in pre-owned property sales.

Liu Jianwei, a senior statistician of NBS, said the property market remained largely stable in April.

Zhang Dawei, chief analyst at Centaline Property, said easier credit policies and multiple cities relaxing hukou (household registration permit) policies to attract talent, were the main reasons for the"Indian summer" in the property market.

"Based on the sales performance of 28 major property developers during the first four months of this year, total sales reached 1,542.6 billion yuan ($224.3 billion), up 9.2 percent year-on-year," said Zhang. "The number for the first three months was 1,082.1 billion yuan, up 4.8 percent year-on-year."

The property market in second-tier cities showed strong momentum during the first quarter despite concerns about overheating and speculation, experts said.

"Barring the cities that are looking to attract talent with easier hukou policies, it is likely that the local authorities will announce follow-up policies to curb property prices," said Yan Yuejin, director of Shanghai-based E-house China Research and Development Institution.

"As for how long the 'Indian summer' can last, it depends on the exact extant of the easier housing loan policies, as neither overcooling nor overheating means stability," Zhang said, adding that there will be measures to stabilize the market very soon.

Suzhou in Jiangsu province, for example, tightened housing policies further on May 11. The down payment ratio for a family's first home purchase has been raised from 20 percent to 30 percent. Newly built property in certain parts of the city cannot be traded for a three-year period after purchase, and for five years in the case of pre-owned property.