Home prices in China rose for the ninth straight month as small cities withstood government curbs to lower house prices.

Prices rose 0.5% from April to May, as 76 of 100 cities reported higher home values despite government measures to cool the market such as larger down payments for second homes, new residential property taxes being tested in the cities of Chonqing and Shanghai, and raised interest rates.

However, there are also signs that the government curbs are having some effect on prices. House price growth is slower than income growth, and the percentage of primary sales investors among buyers is at a record low.

If the new property taxes in Chonqing and Shanghai succeeds in lowering house prices, the program might be expanded nationwide. In May, Premier Wen Jiabao stated that the government is determined to lower property prices tthis time.

Source: Bloomberg