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BEIJING: China's annual housing inflation slowed slightly in April with prices rising 4.3%, data showed on Wednesday, May 18, a further sign that forceful policy tightening is helping to cool exuberant price rises.
The gains in April compares with an annual 5.2% rise in March, and should assuage worries that the world's second-biggest economy faces an imminent collapse in its property market.
The nationwide prices are calculated by Reuters on a weighted average basis. China stopped publishing a nationwide property index at the start of this year.
"Tightening restrictions are having an impact on sales in large cities," said Tao Wang, an economist at UBS in Hong Kong. "The future supply continues to be pretty solid so if that continues, I would expect prices to be more stable."
On a city basis, data from the National Bureau of Statistics showed new home prices in Beijing rose 2.8% in April from a year ago, slowing from a 4.9% pace in March.
In Shanghai, the annual price increase slowed to 1.3% last month, from a gain of 1.7% in March.
The latest data is line with an official release last week, showing that China property sales slowed in April.
Yet, with Chinese home prices still at record levels and grinding stubbornly higher, few analysts think Beijing will relax its tightening stance any time soon.
Indeed, data showed only a handful of Chinese cities experienced actual declines in home prices.
Among 70 cities monitored by the government, only three saw an annual drop in new home prices in April, compared with two in March. On a monthly basis, nine cities posted price declines, compared with 12 in March.
Many economists have warned that a bursting of a property bubble is the biggest risk threatening China's economy in the medium to long term.
Acknowledging that danger, China has tried repeatedly to cool property inflation and curb speculation. Measures taken include limiting the number of homes that each family can buy, and launching a maiden property tax on big and pricey houses.
The central bank has raised interest rates twice and increased banks' reserve requirement ratio five times this year. The latest move was last Thursday, as part of a campaign to check consumer inflation that is fuelled by excessive cash.
To manage their risks, Chinese banks have gone beyond minimum regulatory requirements by enforcing more stringent downpayment standards to make it harder for people to buy and invest in property market. — Reuters
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