* China home prices pick up in Feb despite efforts to cool market
* Both rebar and iron ore futures had their best week since Jan
By Manolo Serapio Jr
MANILA, March 20 (Reuters) - Chinese steel and iron ore futures extended last week’s gains to trade near recent highs on Monday, supported by expectations property sales in the world’s top steel consumer would remain strong despite Beijing’s efforts to tame the sector.
China’s top economic planning agency said on Sunday the government would control rapid flows of bank credit to the property sector to help contain risks. The country’s red-hot property market picked up pace in February after price gains slowed in the previous four months.
“The re-acceleration in new home prices last month raises concerns that Chinese policy is becoming increasingly ineffective at keeping a lid on property prices,” Commonwealth Bank of Australia analyst Vivek Dhar said in a note.
The most-active rebar on the Shanghai Futures Exchange was up 1.1 percent at 3,627 yuan ($525) a tonne by 0309 GMT. The construction steel product reached a three-year high of 3,692 yuan on Wednesday.
Iron ore on the Dalian Commodity Exchange gained 0.8 percent to 720 yuan per tonne, not far below a three-week peak of 735 yuan it hit on Thursday.
Both rebar and iron ore posted their biggest weekly gain in two months last week.
The price gains came after China last week said property sales surged in the first two months of the year despite government measures to cool the market.
The strong sales “ignited market confidence over steel demand from the property sector,” Citi analysts said in a note.
Citi upgraded its projection of China’s 2017 gross-floor-area new starts to a growth of 2 percent from a prior estimate of a decline of 8 percent “and we expect steel demand to follow a similar path”, the analysts said.
Iron ore for delivery to China’s Qingdao port .IO62-CNO=MB slipped 0.3 percent to $92.34 a tonne on Friday, according to Metal Bulletin. But the spot benchmark gained 6.5 percent last week, its biggest such gain since late November. ($1 = 6.9044 Chinese yuan) (Reporting by Manolo Serapio Jr.; Editing by Joseph Radford)