China’s housing prices continued to rise for the fourth straight month in July, according to an official government survey, with the country’s largest cities showing the fastest price increases.
A report on China’s real estate market by the National Bureau of Statistics found that across the 70 cities surveyed, average home prices including subsidised units were up by 0.15 percent compared to June.
While price growth slowed in July slowed compared to June’s 0.17 percent clip, the continuing strength in the housing market across the summer months could indicate a more substantial recovery in the autumn.
Big Four Cities Dominate Growth
During July China’s four largest cities grew faster than the other 66 communities surveyed, demonstrating the concentration of China’s economic strength in its urban areas. Shenzhen led all cities nationwide last month with a 6.26 percent increase in average home prices compared to June. Next in line were Shanghai with a 1.65 percent increase, Guangzhou with 1.19 percent and Beijing with 1.07 percent.
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Despite the continuing strong performance in the big cities, and an increase in average home prices across all 70 cities, the number of cities reporting prices increases stayed stable at 30 for the second month in a row. 31 out of the 70 cities reported that prices continued to fall, while nine cities reported no change in prices from June to July.
In terms of value, sales of housing are up by over 16 percent in 2015 compared to last year, according to a separate report by the bureau this week. The increase in sales is helping to drive higher prices in the largest cities, where supply is scarce, but many smaller communities still suffer from large inventories of unsold homes.
China’s stock of buyerless housing rose to 430 million square metres in July, an 18.1 percent increase compared to the same period of last year.
Prices Still Below 2014 Levels
The good news for China’s government is that several rounds of policy tweaks and interest rate cuts have pulled the housing market out of its year-long slump. However, even after four months of rising rates, average home prices in July remained 5.27 percent below the same period last year.
With the nation’s gyrating stock market having scared away many retail investors, however, the prospects for continued recovery in housing prices look good for the rest of the year.