China’s home sales pick up in May: survey

HONG KONG (Reuters) – China’s housing sales in major cities, measured by floor space,

jumped 37.4 percent in May from a year earlier, a private survey showed on Tuesday, helped by government’s stimulus policies and developers’ push to clear inventories.

The jump compares to a 21.8 percent rise in the April, according to China Real Estate Index System’s (CREIS) survey of 36 major first to third-tier cities.

Home sales in May rose 14.7 percent from April’s level, accelerating from the 11.4 percent increase between April and March.

Rating agency Moody’s changed its outlook on the China property sector on Tuesday to stable from negative, reflecting the effects of supportive monetary and regulatory policies.

“(The change is) to reflect our improved expectations for the industry’s fundamental business conditions over the next 12 months,” said Kaven Tsang, a Moody’s senior analyst, forecasting China property sales value to grow 0 to 5 percent until June 2016.

China cut interest rates for the third time in six months in May, in a bid to lower companies’ borrowing costs and stoke a sputtering economy that is headed for its worst year in a quarter of a century.

In a separate survey released on Monday, prices of new homes in 288 cities edged up 0.05 percent in May from April, the first rise in 14 months, property services provider Real Estate Information Corporation (CRIC) said. Prices in first-tier cities improved by as much as 2.2 percent.

But home prices in May were 1.61 percent lower compared to a year ago, improving April when they were 1.69 percent lower.

“Home prices in some of the cities have shown significant rise…but given the current housing market conditions, we think this wave of price rises will be a modest one,” said CRIC, owned by E-House China Holdings Ltd <EJ.N>, citing still relatively high inventory levels and developers’ conservative approach to land acquisition.

The government is due to publish its May property sales and investment figures on June 11, and price data for 70 of the biggest Chinese cities on June 18.

(Reporting by Clare Jim; Editing by Simon Cameron-Moore)