February Home Price Rally Broadens

New home prices climbed 0.38% in February, up from 0.27% a month earlier and 0.20% in December 2015.

The running tally of the first-tier plus Xiamen:

In November, the first-tier plus Xiamen were 55% of the national price increase, with Shenzhen nabbing 22% of the total national increase.
In December, those numbers were 54% and 23%, almost no change.
In January, the first tier and Xiamen accounted for 52% of the total increase, with Shenzhen alone accounting for 21%, rising 4% mom.

In February, these 5 cities accounted for 41% of the increase nationally. Last month, the rest of the country saw an average decline without these 5 cities. In February, the rally broadened out to the second-tier.

Among the cities heating up:

Nanjing +2.6% mom, +13.3% yoy
Hefei +2.3%, +6.0%
Fuzhou +1.4%, +5.5%
Hanghzou +1.3%, +8.8%
Wuhan +0.8%, +6.2%

Shenzhen still takes the cake at +3.5% mom and +56.9% yoy

Year over year comparison will look good for second-tier cities over the next four months because the housing market didn't turn until the summer. If prices continue at the present pace, however, there could solid double digit gains by late spring in several major second-tier cities.

Existing home price increases are not lagging in price increases nationally, climbing 0.37% nationally, but the first-tier and Xiamen were still 57% of the total increase. Additionally, there was a big outlier in Hefei, which reported +6.7% mom. Add that to the mix and it explains 83% of the national price increase. Overall, only 34 cities reported higher existing home prices in the month of February.

This chart is a bit small, but it lists narrow new home inventory by city. Hefei is the lowest.
Source: 2016楼市去库存下的投资机会

The title of that piece is 2016 inventory destocking presents an investment opportunity. The opposite take is here: China's man-made housing boom. 刘渊:中国楼市的人造繁荣
Rental rate of return that the annual rental income and the ratio of house prices, on behalf of the living needs (rent) and "live + investment" demand (price) difference. It was also directly with rent price ratio, the effect is the same. By the end of February, Shenzhen residential rental yield fell from 2.44% a year ago to 1.66%, Shanghai fell from 2.14% a year ago to 1.92%. Decreased rental rate of return, showing the recent growth in investment demand over the housing needs.
The article also says developers are starting to act like the good times will last, hoarding their property and slowing their sales rate to capture more of the price gains in cities with rising prices.

NBS: 2016年2月份70个大中城市住宅销售价格变动情况

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