China’s property market witnessed upbeat prices in the country’s tier-I and tier-II cities, owing to liberal lending options by banks. Property prices rose 33.1 pct and 6.8 pct on year respectively for the two categories. However, tier-III cities, for the first time since September 2014, saw a rise in prices.

The Chinese authorities have expressed concerns over the recent property rally, and the pace of credit extension decelerated in April, suggesting that China’s overall policy tone has become less dovish. The transaction volume in the first-tier cities has started to cool down following the administrative property curb policies.

Housing demand has improved after policymakers lowered interest rates and transaction taxes. Many buyers also expect property prices to rise or at least remain stable in the near term, reports confirmed. Compared with the previous month, the average price of new private homes rose in 65 out of 70 cities in April, up from 62 recorded in March. Compared with the same period a year earlier, the average price of new private homes rose in 46 out of 70 cities in April, up from 40 in March.

Profit gains in Shenzhen reached 2.3 pct m/m in April compared with an increase of 3.7 pct in March. Shanghai recorded a 3.1 pct sequential gain last month compared with a 3.6 pct rise in March.

"While a hard landing in China’s property market is unlikely, the property rally in the past few quarters is definitely unsustainable. However, some sort of market correction is inevitable," Commerzbank said in a research note.