BEIJING (Reuters) -Growth in new home prices in China was flat again in March versus the previous month, government data showed on Friday, pointing to fragile demand as growing COVID-19 lockdown measures dampened consumer confidence.

Average new home prices in 70 major cities were unchanged on a month-on-month basis for the second time in a row, according to Reuters calculations based on March data from the National Bureau of Statistics (NBS).

On a year-on-year basis, new home prices rose 1.5%, the slowest pace since November 2015, and easing from a 2.0% gain in February.

Over 60 cities have eased curbs on home purchases to support the ailing property market, after a government campaign to reduce developers’ high debt levels pushed the sector into a deep chill in the second half of 2021.

Banks in over 100 Chinese cities have lowered mortgage rates by around 20 to 60 basis points since March，central bank official Zou Lan said on Thursday.

But after signs of improvement in January, a surge in cases of the highly transmissible Omicron variant and strict virus lockdown measures have again cooled demand in many cities.

In tier-one cities, prices gained 0.4% on month, narrowing from a 0.5% rise in February, while growth in tier-two cities was zero.

“The growth slowdown in first-tier cities in March was mainly due to the impact of the COVID pandemic, indicating weaker market expectations,” said analyst Xu Xiaole at Beike Research Institute.

More cities are likely to relax property curbs in the near future, and demand will be gradually released, said Xu.

The property market in the commercial hub of Shanghai slowed with home prices rising at the slowest pace in four months, at 0.3% month-on-month.

Shanghai is in the midst of China’s worst outbreak since the virus emerged in Wuhan in late 2019, reporting more than 20,000 cases daily amid an unprecedented citywide lockdown. Dozens more cities are in partial or full lockdown.

Price growth in Shanghai does not reflect the overall market situation, said analyst Lu Wenxi at property agency Centaline.

“The growth in new home prices in Shanghai will further ease in April,” Lu added.

In March, transactions by value of newly built homes in Shanghai slumped 27% from a month earlier to 36.2 billion yuan ($5.68 billion)，financial magazine Yicai said.

China’s State Council, or cabinet, on Wednesday said more policy measures are needed to support the economy, but analysts are unsure if interest rate cuts would quickly reverse the slump as long as the government maintains its zero tolerance COVID-19 policy.

In the first 12 days of April, new home sales by volume in 30 cities surveyed by Wind were down 55.6% year-on-year, analysts at Nomura said in a client note on Wednesday.

($1 = 6.3739 Chinese yuan renminbi)

(Reporting by Liangping Gao and Ryan Woo; Editing by Muralikumar Anantharaman and Christopher Cushing)

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