House price increases pick up pace in mainland China

The cost of a new home in 100 major cities averaged 9,812 yuan (US$1,577) per square meter last month, rising 1.2 percent from a year ago, the China Index Academy (CIA) said.

The increase accelerated from a 0.03 percent rise in December, when housing prices grew year-on-year for the first time in nine months.

Prices rose 1 percent from December, the eighth consecutive monthly increase, CIA said in a statement.

Property costs are a key social issue in China, where millions of would-be buyers have been priced out of the market, fuelling resentment.

The central government has sought to control residential property prices for the past three years, with measures including restrictions on second and third home purchases, higher minimum downpayments, and annual taxes in some cities on multiple and non-locally owned homes.

The moves cooled the once red-hot market, but demand remains pent-up and government monetary policy has eased in recent months.

CIA said market sentiment was improving after an increase in property transactions and the housing ministry said it supported non-speculative demand — a possible signal of looser controls.

“The stabilization and rebound in the economy, the stabilizing and easing policies, the recovering market confidence and optimism among all parties helped home prices in the first month of 2013 continue the momentum at the end of 2012 to increase and at a bigger margin,” it said in a statement.

More cities saw rises in new home prices last month than in December and increases were faster in first-tier cities and areas along China's coast, it added.

The average new home price in Beijing stood at 25,075 yuan per square meter, rising 2.27 percent in a month and up 5.93 percent year-on-year.

In Shanghai, it was 27,655 yuan per square meter, up 2.3 percent from December and 1.72 percent higher from a year ago.

CIA is owned by SouFun holdings, China's biggest real estate website operator.

New properties are the most important part of China's real estate market and the survey covers prices of both houses and apartments, including flats with prices regulated by the authorities.

Data is collected every month by on-the-spot surveys and through reports by estate agents, property developers and officials.

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