By ESTHER FUNG
SHANGHAI—Home prices in major Chinese cities rose for a sixth consecutive month in November, further evidence that the nation’s housing market is regaining its health.
The gains accelerated from October but analysts said they remained tolerable to Chinese policy makers who have fought for nearly three years to keep prices in check.
Those policy makers face a difficult challenge. They are trying to support economic growth while preventing a sharper rebound in home prices that could threaten social stability. Analysts said they are likely to continue to prohibit multiple home purchases, and that a major easing of market curbs is unlikely as a new generation of Chinese leaders takes over at a time when housing prices remain politically sensitive.
“Looking ahead, we are not expecting any dramatic changes in policy. Home-purchase restrictions will remain for some time in part because you need a broader set of investment alternatives before the limits can be lifted,” said Michael Klibaner, regional director and head of China research at real estate services firm Jones Lang LaSalle JLL +0.80% in Shanghai.
However, the government is likely to expand property tax trials currently in place in Shanghai and Chongqing, Mr. Klibaner said, noting that state media had widely discussed property taxes recently.
Shanghai and Chongqing imposed trial taxes on residential property in early 2011 as part of efforts to curb speculation and soaring prices.
The average home price in 100 major Chinese cities in November was 8,791 yuan ($1,411) a square meter, up 0.26% from CNY8,768 in October, private data provider China Real Estate Index System said Monday.
The data is based on a survey of property developers and real estate brokerages. The survey is compiled with online brokerage SouFun Holdings Ltd., SFUN +0.05% and has been closely watched since the government scrapped its own national property-price index in February last year.
The price rise in November was bigger than October’s 0.17% gain and was fueled by an increase in sales, China Real Estate Index System said, without providing sales figures.
“Some home buyers are saying that if they don’t buy now, next year prices may continue to rise,” said Johnson Hu, a CIMB Securities analyst, who added that high inventory levels would keep prices from rising too quickly.
Terry Li, an executive at an electronics company in Shanghai, said she is among those who are in the market now for fear of facing higher prices later.
“Housing prices are still expensive, especially in the city center, but I am afraid prices will continue to rise next year,” said Ms. Li, who is close to purchasing an apartment after months of searching.
Prices in Beijing and Shanghai rose 0.7% and 0.1%, respectively, in November from October, the survey found.
Still, average prices remain flat this year and lower than a year ago. November’s average price was almost unchanged from January’s CNY8,793 a square meter, and represented a 0.46% decline from the same month a year earlier. It was the eighth consecutive on-year decline, but the pace eased from a 1.0% drop in October.
The data painted a picture of an uneven national housing market. In November, prices rose on month in 60 cities and fell in 38, the survey found. Prices in the other two cities were unchanged.
“In major cities, new supply isn’t rising as fast, so that’s supporting prices,” said Mr. Hu of CIMB.
Property developers, especially listed companies, have reduced or scrapped discounts in major cities, reflecting continued signs of a warming market.
Ratings firm Moody’s Investors Service Thursday revised its outlook for China’s property sector to stable from negative, due to improving sales and greater access to funding for developers.
Still, housing prices are unlikely to rise or fall by more than 5% next year, Mr. Klibaner said. An inventory overhang will limit developers’ pricing power, and the government still has room to offer additional support to first-time buyers to prevent a sharp decline, he said.
Write to Esther Fung at email@example.com