(Yicai Global) Feb. 16 -- More Chinese cities recorded price hikes of new homes rather than price reductions for the first time in 17 months last month.

The number of cities where prices rose in January from December increased to 36 in the data set of 70 large and medium-sized cities, the National Bureau of Statistics announced today.

Prices of new homes in first-tier cities increased by 0.2 percent in January from December after remaining unchanged a month earlier. Prices of new housing in second-tier cities climbed 0.1 percent, following a 0.3 percent decrease earlier. Among the 70 municipalities, Shanghai and Hefei led the group of gainers as prices rose by 0.7 percent.

The data hint the real estate market is warming up again. Part of that comes from policy support. Around the recent Spring Festival, a number of hot cities, including Zhengzhou, Wuhan, and Foshan, lowered their loan interest rates for first-home buyers, The Paper reported today, citing Chen Xiao, senior analyst at the Zhuge House Hunter Data Research Center.

Even the second-hand housing market is looking brighter. Thirteen cities among the 70 hubs recorded price hikes of used housing, up by six from a year ago.

First-tier cities have reversed their property discount trend while second-tier and third-tier cities are narrowing their price declines. For example, prices of second-hand housing in Beijing jumped by 0.9 percent while such homes in Shenzhen and Xi'an got 0.6 percent more pricey.

The second-hand housing market shows how the property market is rebounding, Liu Lijie, analyst at the Beike Research Institute, said to The Paper. The economic, demographic, industrial, and other fundamentals of first-tier cities and core second-tier cities are good, and housing demand is strongly supportive. But China still needs to increase favorable policies in these cities to take the lead in recovery, Liu added.

The real estate market bottomed out early this year, said Zhang Bo, president of the 58 Anjuke Research Institute. Based on January data, the market has yet to improve comprehensively, and differentiation between cities is still obvious. Policies should be constantly enhanced, especially to promote higher demand, in order to stabilize the market, Zhang added.

Editor: Emmi Laine, Xiao Yi