BEIJING (Reuters) - China’s property prices are expected to cool steadily this year amid persistent curbs on buyers and tighter monetary conditions, but the market remains frothy and is subject to volatility, a government think tank said on Monday.
The Chinese Academy of Social Sciences (CASS) said home prices in top-tier cities are expected to plateau in the first half of this year, while surging lower-tier cities may not see price growth slow until the second half.
But China’s property bubbles are still “relatively big”, said Ni Pengfei, a senior researcher with CASS, stressing that current market stability is just a “short-term equilibrium” with market sentiment being particularly “fragile”.
Some major cities may need to roll out more price cooling measures this year, it added, while lower tier cities will likely phase out stimulus policies or even tighten the market to stabilize prices.
China posted its fastest property investment growth in three years in the first quarter, while new home prices also rose in March, suggesting broad market resilience despite a flurry of curbs.
The think tank also advised the government to levy taxes on empty homes in an effort to boost rental supply.
Economists polled by Reuters in late March predicted nationwide home prices would rise just 1 percent this year, after a gain of 5.3 percent in 2017.
Reporting by Jenny Su, Writing by Stella Qiu; Editing by Kim Coghill