BEIJING, April 19 (Reuters) - Clearance of the housing overhang in many of China’s smaller cities is likely to persist, a senior economic planner was quoted as saying on Tuesday, suggesting that smaller centres may continue to prosper from intensifying property curbs in bigger cities.
Ning Jizhe, National Development and Reform Commission (NDRC) vice chairman, made the remarks on Tuesday just hours after China reported an acceleration in home price growth in March on a monthly basis.
Authorities will continue to fend off bubble risks in bigger cities by taking measures from both “the supply and the demand side”, Ning said in an interview with the state radio, without elaborating.
China’s smaller centres, usually referred to as Tier-3 and Tier-4 cities and known to have a large property overhang, have been a bright spot lately as they appeared to have benefited from a spill-over in demand from bigger cities.
Home prices in many smaller cities with no purchase restrictions picked up most visibly in March, but prices also rebounded or had smaller month-on-month declines than in most of the biggest cities.
Westpac said in a note that “authorities will celebrate” Tuesday’s home price data, which offers further evidence of speculation in top tier cities being reined in - but not at the expense of momentum in smaller cities.
Ning emphasised that China was speeding up work on a long-term mechanism to regulate a property market that has had wild price swings in the past decade, amid worries that existing curbs have proven insufficient to dampen resurgent demand.
“When the moment is ripe we can implement it,” Ning said. (Reporting by Yawen Chen and Nicolas Heath; Editing by Eric Meijer)