Home costs in more Chinese cities rose last month than in the previous month as recent interest rate cuts encouraged buying and stoked expectations of a rebound in prices, the government said yesterday.
New home prices in 25 out of the 70 Chinese cities tracked by the government increased last month from the previous month, the National Bureau of Statistics said in a statement, up from just six in May.
The spread of price rises to more cities came despite steps to tighten the market in place for more than two years, including bans on buying second homes, hiking minimum down-payments and imposing property taxes in certain areas.
Expectations for a price rebound are on the rise after the economy recorded its slowest increase in more than three years in the second quarter, raising the likelihood of more policies to boost growth the rest of this year.
The central bank this month took the rare step of slashing interest rates for the second time since early last month, which drove up home sales as mortgage costs were reduced, Ma Xiaoming (馬曉明), an NBS analyst, said in the statement.
Ma said housing demand has been accumulating amid efforts to cool the market and consumers rushed last month to buy due to “worries of a rebound in housing prices.”
Prices of new homes in another 24 cities were unchanged last month compared with 21 the previous month, while 21 cities saw prices fall on a monthly basis, down from 43 in May, the data showed.
Government officials have attributed the slowdown of the world’s second-largest economy, which grew 7.6 percent on year from April to last month, to the weakening of the property market as well as sluggish foreign demand.
Before the interest rate cuts, the government had since December already cut three times the amount of money banks must keep in reserve, to stimulate lending.
Ba Shusong (巴曙松), a prominent government researcher, called on authorities to loosen controls on lending to buyers of small and medium-sized homes to bolster the economy, the state-run Economic Information Daily said yesterday.