The figures, which were released by China’s National Bureau of Statistics on August 18th showed that prices fell in only nine cities during July and remained flat in 11 other cities. The prices increases are widely seen as a reaction to the the loosening of credit by the government during June, and the public’s love of real estate investment.
With increases happening in 49 out of 70 cities, the trend was the strongest since May of 2011 and it nearly doubled the number of cities reporting price increases compared to June, when only 25 cities reported increases in the real estate rates.
Another factor cited in the increase in prices was the selective easing of the central government’s restrictions on real estate sales by many local government which depend on the real estate market for their cashflow. An inspection last month ordered by the State Council found repeated instances of such easing by some local authorities — a trend that the central government has indicated it will soon reverse.
Figures released earlier this month from SouFun Holdings Ltd. (SFUN), the nation’s biggest real-estate website owner, showed new-home prices in 100 cities in July posted the biggest month- on-month gain in more than a year.