China Home-Price Recovery Spreads to More Cities Amid Easing

China’s home-price recovery spread to more cities in December, especially smaller ones, after authorities rolled out easing measures targeting regions with a surplus of unsold homes.

New-home prices climbed in 39 cities, compared with 33 in November, among the 70 cities tracked by the government, the National Bureau of Statistics said Monday. They dropped in 26 cities, compared with 27 in November, and were unchanged in five.

China’s politburo, the top decision-making body of the Communist Party, last month vowed to reduce home inventory as one of its key tasks in 2016, prompting expectation of more easing measures. The area of unsold new homes nationwide increased 12 percent from a year earlier to 441 million square meters (4.7 billion square feet) as of Nov. 30, according to the latest available data from the statistics bureau.

“Policy will continue to be supportive this year to sustain economic growth and market destocking,” Jeffrey Gao, a Hong Kong-based analyst at Nomura Holdings Inc., said before the data release.

Regional Divergence

The regional divergence between cities is “still very evident,” the statistics bureau said in a statement released with the data. “Home-price increases in first-tier cities and some popular second-tier cities are obviously wider than in the others, while prices are still falling in most third-tier cities.”

New-home prices in the southern business hub of Shenzhen jumped 3.2 percent from a month earlier, the quickest pace since October. The financial center of Shanghai trailed Shenzhen to increase 1.9 percent, the fastest in six months. Prices of the two cities jumped 47 percent and 16 percent from a year earlier. Prices rose 0.4 percent in the capital city of Beijing and 0.7 percent in Guangzhou.

The central bank has cut interest rates for six times since November 2014, along with a cut on reserve requirements for all banks, helping to bring personal mortgage rates to the lowest in five years, according to Centaline Group. Adding to eased credit, the central bank last year also cut down-payment requirements for purchases of first and second homes, allowing prospective buyers to borrow more.

Prices rose year-on-year in 21 cities from the previous month, the same as in November, the statistics bureau said Monday. Existing-home prices rose last month in 37 cities from the previous month, compared to 40 in November.