BEIJING (Reuters) -China's new home prices rose slightly in March with demand in small cities still weak despite more local policy easing steps, and renewed COVID-19 flare-ups curbing the appetite to buy.
New home prices in 100 cities grew 0.03% on month, matching the rise in February, according to data from China Index Academy, one of the country's largest independent real estate research firms.
China's rattled property sector has gained some momentum in larger cities since the beginning of the year as authorities take policy action to stoke buyers' interest and ease a liquidity crunch at some major developers.
Premier Li Keqiang early in March called for city-specific property measures to meet home buyers' demand, paving the way for local authorities to relax some curbs based on their city's own conditions.
In March, around 20 small and medium-sized cities announced steps to boost demand, such as allowing smaller down payments, cuts in mortgage rates, subsidies and lower curbs on purchases.
Fuzhou, the capital of the southeastern province of Fujian, this week relaxed curbs on home buying in five districts and allowed some buyers to pay down payments with housing provident funds.
But overall demand remains weak, with 53 of the 100 cities surveyed reporting declines in new home prices in March, compared with a decline in 52 cities in February, the China Index Academy said.
Real estate market woes in small cities have not improved. Prices in tier-three and tier-four cities dropped 0.02% month on month, after a 0.01% fall in February.
New home prices in tier-one cities including Shanghai, which has been fighting a major COVID outbreak since March, rose 0.03%, slowing from February's 0.17% gain.
The pace of recovery in the real estate market was interrupted to some extent by the COVID outbreaks, with the markets in Shanghai and some other areas experiencing spikes in cases looking "dim", according to the China Index Academy.
"Although local governments continue to ease some local property curbs, the pace appears moderate, and we continue to believe Beijing will stick to most of its major property curbs," Nomura analysts said in a note on Friday.
Most property developers in their full-year financial results conferences said they expected to see recovery in the second quarter.
Chairman Yu Liang at China Vanke said the sector is returning to a "normal, rational" stage as the central government reassures on healthy development of the sector.
Regulators and governments at all levels will introduce more policies to stabilise the market, Yu said.
Visitor volume of first-home buyers at development projects in March has returned to end-December levels, said state-backed Greentown China, and added it expected to see recovery in the second quarter.
"The darkest time is behind us," said CIFI Holdings said, but cautioned low-tier cities will remain under pressure.