UPDATE 1-China May, growth in new housing prices is the fastest in five months

* New housing prices in May + 0.7% m / m vs + 0.6% in April

* Annual growth + 10.7% vs + 10.7% in April

* 67 cities out of 70 reported higher prices, identical to those in April

BEIJING, June 18 (Reuters) – New home prices in China have risen to their highest level in five months in May, complicating the government's efforts to control sparkling real estate markets as it further boosts energy prices. slowdown in the economy.

Average new house prices in China's 70 major cities rose 0.7% in May from the previous month, after rising 0.6% in April and the fastest pace since December, according to calculations. Reuters based on data from the National Bureau of Statistics (NBS) regarding Tuesday.

This marked the 49th consecutive month of price increases. Sixty-seven of the 70 cities surveyed by the NBS reported higher prices in May, the same as in April.

On an annual basis, house prices rose 10.7% in May, unchanged from the April growth rate.

Beijing has repeatedly urged local governments to keep uncontrollable prices under control, but a recent easing of credit conditions, pent-up demand for housing and an implicit government mandate to avoid a collapse have allowed the market to resist surprisingly .

But further restrictions on homebuyers could exacerbate the pressure on the Chinese economy, which has seen sales slow as a result of weak domestic demand and escalating trade war with the United States. United.

Last week's data revealed the largest decline in real estate sales for nearly two years in May, as well as significantly slower growth in investment and new construction starts, suggesting future economic weakness and additional measures to stimulate government growth.

RISKS OF DECREASING POLICY

Housing price growth in China has slowed significantly since the second half of 2017 due to strong local restrictions on speculative investment.

But trends have been uneven across the country, with recent signs of resurging price pressures. Some smaller cities with rising inventories have eased restrictions on home buyers to boost consumer confidence and demand.

Mortgage rates have also fallen in some regions as a result of regulators calling for banks to increase lending to support the economy.

The average interest rate on first home loans continued to fall in May to reach its lowest level since 2018, according to a market report quoted by the state-backed Economic Information Daily.

New household loans – mainly mortgages – remained high, reaching 662.5 billion yuan (95.70 billion US dollars) in May, accounting for 56.14% of total new loans last month.

Higher prices were mainly driven by small tier 3 cities, up 0.8% on a monthly basis, compared with a gain of 0.5% in April, the statistics office said in a note. accompanying the data.

Prices in the four major Chinese cities – Beijing, Shanghai, Guangzhou and Shenzhen – grew more slowly in May, rising 0.3% from 0.6% the month before.

Level 2 cities, which include most of the provincial capitals, grew by 0.6%, the same rate as the previous month. ($ 1 = 6.9227 Chinese yuan in renminbi) (Report by Yawen Chen, Min Zhang and Ryan Woo, edited by Kim Coghill & Shri Navaratnam)