BEIJING: China's home prices are expected to rise modestly this year and next, with property controls likely to be extended to more cities as major markets heat up, a Reuters poll showed.
A recovery in the housing market, which accounts for 15 percent of gross domestic product, has helped stabilise economic growth this year and has provided a boost to the construction industry while also lifting prices of many commodities.
However, with home values surging in major cities - Shenzhen home prices rose 62 percent year-on-year in April - and secondary markets also heating up, many cities are starting to impose curbs to keep prices in check.
All but one analyst surveyed expect tightening measures to be expanded to more cities this year, possibly through requirements on higher down payments or restrictions on the number of homes that can be purchased.
China's average nationwide home prices are seen rising 6.3 percent in 2016 from a year ago, according to the median of forecasts from 12 analysts. That is up from the 4 percent gain predicted in the last poll conducted in February.
"Loose monetary conditions increased demand for real estate, while slower investment growth led to tight supply in some areas," resulting in higher home prices, Everbright Securities analysts Xu Gao and Yang Yewei said.
Housing inventories reached 718.53 million square meters by the end of December, official data showed, which many respondents believed would take over three years to clear.
All 12 respondents thought the pickup in property investment would continue through the end of this year, after growing just 1 percent last year.
Property development investment was up 7.2 percent year-on-year for January to April. Data on May property development investment will be released Monday.
Poll respondents believed secondary markets such as Suzhou, Hangzhou and Dongguan near the country's largest cities will see strong growth for the remainder of this year, while smaller cities will underperform on prices due to a supply glut.
Poll respondents see Chinese home prices as slightly expensive. On a scale of 1 to 10, where 1 is extremely cheap and 10 is extremely overvalued, the median reply was 7, the same as in the last poll.
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