According to the National Bureau of Statistics, national sales of commodity housing during the first quarter totaled 208.98 million square meters, up 41.2 percent compared with last year. Benefitted from the rising home prices, total sales value also shot up by 61.3 percent year-on-year to RMB 1,399.2 billion. In Beijing, total transaction volume of residential property during the first three months was up 80.7 percent year-onyear to over 3 million square meters, while the sales figure in Shanghai increased by over 40 percent to nearly 4 million square meters.
Supported by robust housing demand, home prices continued to soar across the country in March. Latest data from the Statistics Bureau revealed that a total of 68 tracked cities, out of 70, saw new home prices rising in March. Among which, Shanghai topped other first-tier cities with a 3.2 percent monthly increase, while Shenzhen, Beijing and Guangzhou followed with monthly increases of 2.8 percent, 2.7 percent and 2.5 percent, respectively. Compared with the same period past year, new home prices in Guangzhou witnessed the highest growth in March, up 11.1 percent year-on-year. Beijing seconded with an 8.6 percent yearly growth, while Shanghai posted a 6.4 percent increase.
While the property market performed quite well over the first quarter, it was heavily driven by the temporary upsurge in housing demand.
Due to the traditional peak season after the Spring Festival holidays and the fears of new cooling measures from local governments, panic homebuyers were on a buying spree to snap up flats in March, in an attempt to avoid paying the coming 20 percent capital gains tax. We expect the buying spree to end in April when those new cooling measures take effect, and the growth in both home prices and transaction volume should then slow down. However, given that housing demand is still robust, especially in first-tier cities, a significant downward correction in home prices is unlikely in the near term.