China’s July housing data showed prices of new homes rose in the largest number of cities in 14 months, as sentiment improved after interest rate cuts and incentives for first-time buyers.
Prices climbed from a month earlier in 49 of the 70 cities tracked by the government, the National Bureau of Statistics said on its Web site yesterday. That was the most since May last year and compared with 25 cities in June. Prices fell in nine cities and were unchanged in 12.
Buyers, buoyed by two interest-rate cuts since June, have returned to the market even as the government pledges to maintain real-estate curbs to make housing more affordable. An inspection last month ordered by the State Council found recent increases in property prices and easing policies by some local authorities among problems that need “particular attention,” Xinhua news agency reported on Friday.
“Today’s data show demand from first-home buyers is very strong and the interest-rate cuts had a big impact on the market,” said Shen Jianguang (沈建光), chief Asia economist at Mizuho Securities Asia Ltd in Hong Kong.
“The government may issue new tightening measures, but they would be mild because it’s facing a big dilemma of balancing economic growth and property curbs,” he said.
China’s economy expanded 7.6 percent in the second quarter from a year earlier, the slowest pace in three years as Europe’s debt crisis crimped exports and the government’s property crackdown cooled domestic demand. The slowdown may extend into a seventh quarter, with Deutsche Bank AG cutting its growth estimate for the three months through September to 7.5 percent from 7.9 percent.
China’s economy expanded 7.6 percent in the second quarter from a year earlier, the slowest pace in three years as Europe’s debt crisis crimped exports and the government’s property crackdown cooled domestic demand. The slowdown may extend into a seventh quarter, with Deutsche Bank AG cutting its growth estimate for the three months through September to 7.5 percent from 7.9 percent.
Friday’s report adds to evidence the housing market is picking up after the People’s Bank of China cut interest rates for the first time in three years on June 7 and announced a second reduction less than a month later.
About 30 Chinese cities have issued “fine-tuning” policies since the second half of last year, according to Centaline Property Agency Ltd (中原地產). Yangzhou introduced home subsidies, Beijing allowed some discounts on mortgages for first-home buyers and Shanghai raised the tax threshold on purchases of some homes.
Figures released earlier this month from SouFun Holdings Ltd (搜房網), the nation’s biggest real-estate Web site owner, showed new-home prices in 100 cities last month posted the biggest month- on-month gain in more than a year.
“There’s still quite a bit of pent up demand out there and it’s being artificially pushed down,” Zhang Xin (張欣), chief executive officer of Soho China Ltd, the largest developer in Beijing’s business district, said in an interview on Thursday.
Among major cities, new-home prices in Beijing rose 0.3 percent from June, while the southern business hub of Guangzhou added 0.2 percent, yesterday’s statistics bureau data show. Prices in Shanghai and Shenzhen were unchanged.
Of the nine cities reporting a decline in monthly prices, the eastern city of Wenzhou had the biggest drop of 0.8 percent, followed by the port city of Ningbo with a slide of 0.6 percent.
Prices of existing homes rose in 38 cities last month from June, up from 31 cities the previous month, the report showed.
The cost of buying a new home is still declining in most cities on an annual basis, the data showed.
Prices dropped in 57 of the 70 cities surveyed last month from a year earlier, unchanged from the number in June. Prices in Wenzhou dropped 15.6 percent last month from a year earlier and those in Ningbo fell 7.8 percent.
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