China home prices in major cities surged as much as 60% during the first three months of 2016, despite a housing surplus leftover from the 2013 construction boom. Home prices in lower-tier cities however continued to fall.
The data, based on a survey conducted by the National Bureau of Statistics across 70 cities on the Mainland, showed that year-on-year prices for newly constructed residential buildings fell in 29 cities, increased in 40 and remained unchanged in one. Year-on-year prices of second-hand homes fell in 23 cities, increased in 46 and were unchanged in just one. Year-on-year price rises for second hand homes topped 60%.
Total investment in real estate development in the first three months of 2016 was up 6% year-on-year of which investment in residential buildings was up by almost 5%. Selling has also become tougher due to the tightening of rules on loans and down payments aimed at cooling the market and the general slowdown in economic growth.