China: New home prices rose by 0.7% on average in May but a two-speed market is emerging

A new blog post by the Asia Pacific team highlights the extent to which house price growth varies across Chinese cities. In May, prices in Tier 3 cities rose the most, up 0.8% month-on-month, followed by Tier 2 (0.6%) and finally Tier 1 (0.3%). While the government has stayed firm on general housing policy controls, especially those in Tier 1 markets, the team expect the government will allow local authorities to readjust their controls, in particular in those cities where the economy is slowing and housing inventories are on the rise.