China August home prices rise on gains in major cities
BEIJING — China’s new home prices, spurred by strong home buying in major cities, rose at the fastest rate in at least two-and-a-half years last month despite government measures to keep prices in check.
The central government has been tightening property sector controls for nearly four years to rein in surging house prices, restricting second-home purchases and slowing the flow of credit to developers. But Beijing is also concerned that excessive curbs on the housing sector could derail the country’s fragile economic recovery.
Analysts and government researchers have called for more sustainable measures, such as land reform and property taxes, to rein in the real estate market, rather than relying on moves such as limits on home purchases.
“We think the government is likely to keep property policy stable as the mild recovery of the broader economy is not so stable yet,” said Credit Suisse property analyst Du Jinsong.
Average new home prices in China’s 70 major cities rose 8.3 per cent from a year earlier, according to Reuters calculations based on data published by the National Bureau of Statistics. That accelerated from July’s 7.5-per-cent gain to be the biggest increase since Reuters began calculating the nationwide figure in January 2011.
From a month earlier, prices rose 0.8 per cent last month, picking up slightly from July’s gain of 0.7 per cent to end a four-month run of moderating rises. Sixty-six cities posted month-on-month price gains, up from 62 in July, the bureau said.
Some of the country’s largest cities continued to show rises well above the national average, with prices up about 15 per cent in annual terms in Beijing and Shanghai, and more than 18 per cent in the southern cities of Guangzhou and Shenzhen.
For the fourth month in a row, the eastern city of Wenzhou was the only one to post a decline, with prices dropping 2.1 per cent from last year.
The central government’s difficulty in checking house prices is partly due to strong demand for property, which is seen as a safe haven investment, and to efforts by local governments to sell land for much needed revenues.
The Housing Ministry recently called in officials from seven cities to talk about next steps in property tightening. However, local measures are unlikely to translate into a broader crackdown, given property affects some 40 other industries from cement to steel to furniture and has helped buoy an economy that is beginning to find its feet after a long slowdown.