Economy

Home Prices Rise In Fewer Chinese Cities In August

Home prices increased in fewer Chinese cities in August, figures from the National Bureau of Statistics showed Monday.

Shanghai, Beijing and Xiamen in southeast China's Fujian Province were the cities where new residential property prices were unchanged from July while the other 12 all registered month-on-month decreases ranging from 0.1 percent to 0.7 percent, according to the bureau.

The majority of the 70 cities surveyed by the bureau still reported a monthly price increase for new homes, although the number dropped to 52 last month from 61 in July.

Shenzhen saw prices fall 1.9 percent from a year earlier, the first annual fall since March 2015, while its monthly decline further deepened to 0.4 percent from July's 0.2 percent. Guangzhou R&F Properties Co rallied as much as 10.8%, the most in nearly two months.

While regulators have intensified their crackdown on property speculation in more than 45 major cities, the buying frenzy came to smaller centres this year as local governments offered cheap credit and imposed few restrictions in the hope of clearing a housing glut.

"The market was anxious that China might step up tightening if home prices continued to rise".

One noticeable trend in August was that "price stabilisation spread to the lower-tier cities" as the average price growth declined for the second consecutive month, said Cindy Huang, director of corporate ratings at Standard and Poor's Rating.

Rocketing prices, especially in major cities, had fueled concerns about asset bubbles.

The market was also cooled by relatively tightened liquidity conditions as the government moved to contain leverage and risk in the financial system.

China's value-added industrial output grew 6.7 percent year-on-year in the January-August period, 0.7 percentage point higher than the growth rate over the same period last year, according to the NBS.

The service sector production index increased 8.3 percent year-on-year in the January-August period, up 0.2 percentage point from the same period last year.

China's top three developers by sales - Country Garden Holdings Co (碧桂園), China Vanke Co (萬科) and China Evergrande Group (恒大集團) - rose 4.28 percent, 0.4 percent and 4.3 percent respectively. Prices were unchanged in Beijing and Shanghai. He added that in China's four biggest cities, both the primary and secondary market has seen a contraction in price expansion for the 11 consecutive month as tough cooling measures take effect.

China should accelerate the establishment of a long-term mechanism to stabilize the property market, said Liu Hongyu, head of the real estate research institute at Tsinghua University.



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