House prices in China’s leading cities surged as much as 63 per cent in the year to March while lower-tier cities saw prices tumble, highlighting the country’s increasingly bifurcated market.
In places such as Shanghai and Shenzhen, soaring home prices and subdued wage growth have sparked a frenzy of borrowing — estimated at an additional $48bn in January alone — prompting city governments, wary of a repeat of the US subprime crisis, to crack down.
These measures, introduced in January and including curbs on financing for downpayments and second homes, have had little impact so far in the “tier-one” cities. Year-on-year price rises in March were as much as 63 per cent in Shenzhen and 30 per cent in Shanghai, according to the National Bureau of Statistics’ monthly 70-city property price survey.