The Chinese real estate market cooled marginally in April from the previous month’s torrid pace of activity, though more developers across all city tiers reported rising prices. 

Our headline real estate index fell 3.4 points in April to 59.5, indicating that the industry is seeing a still-robust pace of expansion, even though developers said credit remained relatively tight. 

Our survey suggested prices rose at their fastest pace in nine months, with 43 per cent of developers saying first-time buyers were the largest cohort, 39 per cent saying upgraders were the largest, and the remainder citing those buying an additional property.

The results of our survey suggest the Chinese housing market continued to defy expectations for a slowdown. Signs that local governments have eased restrictions on property purchases have prompted buyers to pay more to get on to the property ladder — our monthly survey of consumers showed the smallest number on record in April saying now was a bad time to buy a home to live in. 

This consumer bullishness explains why activity has improved, even though the percentages of developers reporting that first-time buyers are paying above benchmark mortgage rates, and putting down deposits of 30 per cent or more, have not fallen much since hitting their cyclical peaks a year ago. 

The leadership has been reluctant to relax its stance towards the housing market owing to concerns about financial system risk. On the other hand, local governments are reliant on land sales to fill gaps in their budgets and so regulators have tolerated the loosening of purchase restrictions by some cities. 

An average read of January-April activity suggests the pace of expansion so far this year has been slightly faster than in 2018, but slower than in 2016-17, when shackles on the market were removed to support the national economy. 

The government is likely to continue to rely on the housing market to buck up consumption and meet annual growth rates. But it has also signalled its unease with the latest burst of activity. In early April, the Communist party reiterated that “a home is for living in, not for speculating on” — repeating a mantra that has governed its relatively cautious approach to the national market since 2017.

FT Confidential Research is an independent research service from the Financial Times, providing in-depth analysis of and statistical insight into China and south-east Asia. Our team of researchers in these key markets combine findings from our proprietary surveys with on-the-ground research to provide predictive analysis for investors.