CHINA’S home prices in March gained at the fastest pace in almost two years but that growth may slow as local authorities tighten home purchase requirements in the two top performing cities on fears of a bubble forming.

    Shenzhen continued to be the top performer, with home prices surging 61.6 percent from a year ago, followed by Shanghai with a 25 percent gain. Prices in the two cities were up 3.7 percent and 3.6 percent respectively from a month earlier.

    Average new-home prices in 70 major cities rose 4.9 percent last month from a year ago, picking up from February’s 3.6 percent rise, according to Reuters calculations based on data released by the National Statistics Bureau (NBS) yesterday.

    March prices were up 1.1 percent compared to a month ago.

    The NBS data showed 40 of 70 major cities tracked by the NBS saw year-on-year price gains, up from 32 in February.

    China’s housing market bottomed out in the second half of 2015 on a series of government support measures, but a strong rebound in prices in the biggest cities has sparked concerns that some markets may be overheating, driving Shanghai and Shenzhen’s authorities to tighten down payment requirements for second homes and raising the eligibility bar for non-residents.

    While home sales in the two cities plunged as much as 52 percent after the tightening, prices eased only by single digit, according to data from China Real Estate Index System (CREIS).

    April’s official data, which will reflect the impact of the tightening measures, is due to be released in mid-May.(SD-Agencies)