China's housing market is still cooling after a red-hot run in 2016

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China’s property market continued to cool in May with the number of cities reporting price growth declining.

According to data released by China’s National Bureau of Statistics (NBS), prices increased in 56 of 70 cities monitored, down on the 58 previously reported in April.

Prices fell in nine centres and were unchanged in the remaining five.

However, while prices increased in fewer centres — suggesting that regulators are succeeding in their attempts to cool the nation’s hottest housing markets — it wasn’t enough to see price growth slow across the nation in weighted terms.

According to calculations from Reuters, prices rose by 0.7% in May, the same pace reported in April. While unchanged, prices have accelerated noticeably from the levels reported earlier in the year.

In January this year, prices grew by just 0.2% before slowly re-accelerating in recent months.

Of the major cities, Reuters calculates that prices fell by 0.6% in Shenzhen while those in Beijing and Shanghai were flat, reflective of recent measures introduced by local authorities to stymie rapid price growth in late 2016.

In other larger centres, prices rose by 0.1%, 0.9% and 0.8% in Tianjin, Guangzhou and Chongquing.

That suggests that much of the national increase was driven by cities in May.

According to Bloomberg, citing data from the NBS released last week, new home sales in smaller cities rose by 13% to 871 billion yuan in May from a year earlier, topping the 8% gain reported in April.

Faced with large amounts of unsold inventory as a result of prior overbuilding, authorities have been attempting to encourage buyer demand in smaller Chinese cities.

Reflective of slower price growth this year compared to the same period in 2016, the year-on-year increase in new property prices continued to ease, even with the 0.7% gain reported during the month.

Reuters calculates that prices nationally increased 10.4% in weighted terms, down from 10.7% in April.

That was the sixth consecutive month that a slower year-on-year increase was reported, leaving it below the recent cyclical peak of 12.6% reported in November 2016.

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