Property prices in China increased for a third straight month in August compared to the previous month, as the central bank's recent policy easing boosted demand for homes, the latest figures released by the National Bureau of Statistics showed Tuesday. However, prices increased in fewer cities compared to July.
House prices increased compared to the previous month in 35 out of the 70 cities surveyed in August. This compares to 49 cities in July. House prices fell in 19 Chinese cities in August, while prices in 16 cities remained unchanged.
On an annual basis, home prices fell in 53 Chinese cities, less than 58 cities, which saw house price declines in July.
Among major cities, Beijing recorded a 0.1 percent increase in house prices on a monthly basis in August, though prices dropped 0.6 percent from a year earlier. In Shanghai, prices remained unchanged on a monthly basis, but fell 1.5 percent year-on-year.
Buying activity is most likely to have received a boost from the two interest rate cuts by the People's Bank of China this year. The rate reductions were intended to support growth which eased to a three-year low of 7.6 percent in the second quarter.
China first started its efforts to cool property prices and curb speculation in April 2010. Beijing had hiked down-payment ratios, restricted purchase of additional homes, introduced property taxes and boosted social housing in its effort to contain the risk of a property market bubble.
Chinese Premier Wen Jiabao's recent comments indicates that the property market curbs will not be lifted any time soon. During an inspection tour to Tianjin early this month, Wen said the country still needs to resolutely curb speculative property investment. He said the property market controls are still in a "critical stage."
by RTT Staff Writer
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