Workers carry out construction at a property project site in Nantong, Jiangsu province. [Photo/for China Daily] Cooling measures to play a bigger role in stabilizing property market Home prices in major Chinese cities saw mild year-on-year growth in February and experts expect the tightening measures to play a bigger role in cooling home prices and stabilizing the property market. Prices of new homes in the 70 cities tracked by the National Bureau of Statistics rose by 0.36 percent on a monthly basis in February, compared with the 0.28 percent gain in January. On a yearly basis, prices grew by 4.06 percent last month. Out of the 70 cities, 56 cities saw price growth in February, three more than in January. Two cities reported no change, and 12 recorded a decrease in prices."Although home prices in various Chinese cities performed quite differently on a monthly basis, all the cities saw a mild growth in year-on-year terms," said Sheng Guoqing, chief statistician with the NBS. Despite the lower base of last year, when the real estate sector in the country was battered due to the novel coronavirus epidemic, the industry is witnessing robust demand due to the country's faster-than-expected economic recovery. New home prices in the four top-tier cities rose by 0.5 percent on a monthly basis, with Guangzhou seeing the maximum gain of 0.9 percent, followed by Beijing with 0.7 percent, Shanghai at 0.5 percent, and Shenzhen at 0.1 percent. Unlike a year ago, the four major cities saw a 4.8 percent growth in new home prices, up 0.6 percentage point from that of the previous month, according to the NBS. First-tier cities outperformed smaller cities in terms of new home price growth. Prices in the 31 second-tier cities monitored by the NBS rose by 0.4 percent on a monthly basis, and by 4.5 percent on a yearly basis, while the figures were 0.3 percent and 3.6 percent respectively for the 35 third-tier cities. "With millions of people deciding to stay put during the Spring Festival holiday, the home market became very active in major Chinese cities, leading to price increases," said Xu Xiaole, chief market analyst with the Beike Research Institute. In the pre-owned home market, first-tier cities again took the lead in price gains. Fifty-five of the 70 cities reported price growths, six more than in January. Compared with January, the top-tier cities saw a 1.1 percent gain in existing home trading. Specifically, Shanghai reported the largest month-on-month increase of 1.3 percent in transaction prices among the top four cities, followed by Beijing with 1.2 percent, Guangzhou with 1 percent, and Shenzhen with 0.9 percent. The four cities witnessed a 10.8 percent growth on a yearly basis in existing home prices. Used home prices in the 31 second-tier cities rose by 0.4 percent from a month ago, and by 2.9 percent on a yearly basis. The 35 third-tier cities saw their existing home prices rise by 0.2 percent from the previous month, and an increase of 1.9 percent from the same period a year ago. "Quite a few cities have fine-tuned their home purchase measures recently, which effectively helped stabilize home prices. Home price stability would remain as the focus of the residential market," said Yan Yuejin, director of the Shanghai-based E-house China Research and Development Institution. "In Shenzhen and Shanghai, new tightening policies released recently are expected to cool down the local home markets. We believe that more cities will announce their own cooling measures as the conventional warm-up season is approaching," said Zhang Dawei, chief analyst at Centaline Property Agency Ltd. This year may prove challenging for the real estate developers due to the economic headwinds, and financial de-risking may become a renewed focus, according to Savills China research.