Amidst China's economic slump, the country has released encouraging numbers for the housing sector as home prices rose during last month.

Despite restrictions on lending and other such measures that authorities have taken to stabilize the economy, home prices in first-tier cities in China (including Beijing, Shenzhen and Shanghai) showed a robust increase in March.

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According to the latest data, the average new home price showed a 0.85 percent increase in March, up from a 0.38 percent increase in the month of February. China's fixed-asset investment surged by 10.7 percent during the first quarter, fueled by cheap credit. The construction of new houses also increased by 19.2 percent in March. However, third tier cities showed a three to four percent decline in their home prices.

In the month of March, new home prices increased in 62 cities, up from 47 cities which registered an increase in February. Eight cities reported a drop in new home prices during the same period, down from a drop in 15 cities in the month of February. This data excludes government subsidized housing.

China has introduced various measures to regulate its housing sector better. The government is trying to stop the real estate bubble, being spurred by easy credit terms.

China started easing its monetary policies for the housing sector in 2012. The People's Bank of China lowered its benchmark interest rate on several occasions. The government is now looking to reverse the process.

According to the data released by the National Bureau of Statistics, real estate is the fastest growing sector of the Chinese economy. During the first quarter of the year, its contribution to the country's gross domestic product (GDP) increased by 9.1 percent on a year-on-year basis.

Tagschina, Economy, Housing Sector