Most Chinese cities see higher home prices

New home prices rose in almost all major Chinese cities in March, as transactions soared ahead of renewed government control measures, according to data issued by the National Bureau of Statistics (NBS) on Thursday.

Of a statistical pool of 70 major Chinese cities, 68 saw home prices increase in March from a month earlier, up from 66 in February, the NBS said in a statement on its website.

First-tier cities recorded the largest monthly increase in new home prices, with Shanghai's 3.2-percent growth topping the list, followed by 2.8 percent in Shenzhen and 2.7 percent in Beijing.

Home prices continued to decline in the east China city of Wenzhou, the only city that saw a price decrease last month.

On a year-on-year basis, 67 cities registered higher prices in March, according to the statement. The equivalent figure in February was 62.

Both Beijing and Guangzhou logged gains of 11.2 percent, the largest year-on-year increases among the 70 cities.

Expectations of higher home costs contributed to a purchase rush ahead of the implementation of government control measures, prompting property developers to either cancel discounts or hike prices, said Liu Jianwei, a senior statistician with the NBS.

The government has adopted a string of measures, including bans on third-home purchases, property tax trials and affordable housing construction, since 2012 to contain runaway home prices, which have served as a key economic driver in recent years.

However, the property market started to rebound unexpectedly in the second half of 2012 on the back of the country's pro-growth policies, which included two consecutive interest rate cuts.

Recent signs of a strong market rebound have prompted the central government to push local authorities to adopt new control measures by the end of March.

People selling their homes have been irritated by a new control measure that imposes a capital gains tax as high as 20 percent of the profit made on a home transaction, an expense that is expected to be passed on to buyers.

The new measures have already taken a toll on the market, as used-home transactions have contracted since April 1, Liu said, adding that home prices will likely stabilize this month.

The floor areas of new homes sold in 40 major cities from April 8 to April 14 dropped 20 percent to 5.14 million square meters from the average weekly level in March, figures from Centaline Property show.

First-quarter investment in property development climbed 20.2 percent, down from 22.8 percent in the first two months, according to NBS data.

"Home prices will show a steady trend as a whole, but there is a chance that first-tier cities will brace for depressing prices," said Zhang Dawei, director of Centaline Property's research center.

Real estate development data may be weaker in the second quarter, as the change in housing transactions will affect market expectations, according to a HomeLink report.

Government orders may help restrain the market for some time, but experts have suggested that a long-term mechanism should be established to stabilize the mega-market in which the annual transacted floor area stands at 1 billion square meters.

Qin Hong, a researcher with the Ministry of Housing and Urban-Rural Development, said the government needs to play the market card to restore order.