China Home Prices Keep Momentum in July

China’s housing prices continued to rebound in July, rising by 0.54 percent compared to June, as the country’s real estate recovery refused to wilt in the summer heat.

The average home price nationwide now stands at RMB 10,685 ($1,721) per square metre, according to a survey of 100 cities by the China Index Academy, a unit of online real estate platform Soufun.

In addition to beating July’s hot weather, the continued recovery in the housing market also came despite the recent stock market crash, which saw equity prices drop sharply during July.

Housing Prices Recovering After One-Year Slide

July’s housing prices indicate that the market is sustaining momentum during the summer months, and that the recovery in home demand could well continue to grow in the second half of 2015.

Last month’s 0.54 percent climb in prices showed only a slight slackening from June’s 0.56 percent rate of increase. The Academy found that housing prices rose by 0.50 percent in May after nearly a solid year of sliding prices.

The turnaround in China’s housing demand comes after government rule changes at the end of March helped to bring more buyers back into the market. The central bank has also made several rounds of interest rate cuts since late last year.

Rebound Surviving the Summer

For the second straight month, Shenzhen led all cities nationwide with a 9.73 percent increase in prices last month, as the Guangdong border town continues to benefit from its proximity to Hong Kong.

Among China’s three other first-tier cities, Beijing ranked fifth last month in terms of price increases, with a 1.49 percent jump compared to June, and Shanghai placed tenth with a 1.16 percent rise. Guangzhou saw prices fall by 0.23 percent.

Overall, 53 cities reported falling prices, up from just 46 in June. Prices rose in 46 cities last month, the survey found, compared to 53 in June.

City	M-o-M Change	Average price (RMB / m2)	Province	City Tier
Anshan	-0.10%	5106	Liaoning	Third
Baoding	1.39%	5987	Hebei	Second
Baoji	1.03%	3922	Shaanxi	Third
Baotou	-0.72%	5387	Inner Mongolia	Third
Beihai	-0.85%	5495	Guangxi	Third
Beijing	1.49%	33205	Beijing	First
Changchun	0.94%	6887	Jilin	Second
Changsha	-0.64%	6323	Hunan	Second
Changshu	0.33%	9124	Jiangsu	Third
Changzhou	-0.07%	7262	Jiangsu	Third
Chengdu	-0.42%	7885	Sichuan	Second
Chongqing	-1.05%	6946	Chongqing	Second
Dalian	-1.06%	10486	Liaoning	Second
Dezhou	0.70%	4485	Shandong	Third
Dongguan	2.25%	9259	Guangdong	Second
Dongying	-1.93%	5400	Shandong	Third
Erdos	-0.71%	8524	Inner Mongolia	Second
Foshan	-0.17%	8415	Guangdong	Second
Fuzhou	-0.22%	13178	Fujian	Second
Ganzhou	-1.65%	5711	Jiangxi	Second
Guangzhou	-0.23%	17112	Guangdong	First
Guilin	-1.06%	4939	Guangxi	Second
Guiyang	-0.83%	4682	Guizhou	Second
Haikou	0.08%	9150	Hainan	Second
Handan	-0.29%	5187	Hebei	Third
Hangzhou	0.53%	16026	Zhejiang	Second
Harbin	-0.61%	7147	Heilongjiang	Second
Hefei	0.12%	7509	Anhui	Second
Hengshui	0.14%	4858	Hebei	Third
Heze	0.45%	4229	Shandong	Third
Hohhot	-0.45%	6613	Inner Mongolia	Second
Huai'an	0.00%	4738	Jiangsu	Third
Huizhou	1.23%	6421	Guangdong	Third
Huzhou	-0.94%	8574	Zhejiang	Third
Jiangmen	-0.34%	5856	Guangdong	Third
Jiangyin	-0.81%	6280	Jiangsu	Third
Jiaxing	-0.44%	7236	Zhejiang	Third
Jilin	1.35%	5566	Jilin	Second
Jinan	-0.39%	8581	Shandong	Second
Jinhua	0.02%	8544	Zhejiang	Second
Kunming	-1.66%	7817	Yunnan	Second
Kunshan	-0.45%	9286	Jiangsu	Third
Langfang	-0.92%	7093	Hebei	Third
Lanzhou	0.80%	7034	Gansu	Second
Lianyungang	-0.56%	5832	Jiangsu	Third
Liaocheng	-1.33%	4666	Shandong	Third
Liuzhou	0.50%	7056	Guangxi	Third
Luoyang	-0.51%	5316	Henan	Second
Ma'anshan	1.10%	4973	Anhui	Third
Mianyang	0.66%	4881	Sichuan	Third
Nanchang	0.89%	8885	Jiangxi	Second
Nanjing	0.53%	14023	Jiangsu	Second
Nanning	-1.58%	7223	Guangxi	Second
Nantong	-0.05%	8098	Jiangsu	Third
Ningbo	-1.08%	12137	Zhejiang	Second
Qingdao	0.97%	9044	Shandong	Second
Qinhuangdao	-1.26%	6494	Hebei	Third
Quanzhou	-1.08%	7588	Fujian	Second
Rizhao	-2.22%	12108	Shandong	Third
Sanya	0.19%	5597	Hainan	Second
Shanghai	1.16%	20141	Shanghai	First
Shantou	0.16%	34118	Guangdong	Third
Shaoxing	-1.12%	8101	Zhejiang	Third
Shenyang	0.95%	8571	Liaoning	Second
Shenzhen	9.73%	7261	Guangdong	First
Shijiazhuang	1.13%	37821	Hebei	Second
Suqian	-0.32%	7098	Jiangsu	Third
Suzhou	0.35%	4612	Jiangsu	Second
Taiyuan	0.29%	7023	Shanxi	Second
Taizhou	-0.24%	10186	Zhejiang	Third
Taizhou	-0.89%	6255	Jiangsu	Third
Tangshan	0.19%	5860	Hebei	Second
Tianjin	0.71%	10688	Tianjin	Second
Urumqi	-0.92%	7229	Xinjiang	Second
Weifang	0.18%	4486	Shandong	Third
Weihai	0.60%	6341	Shandong	Third
Wenzhou	-0.55%	12836	Zhejiang	Second
Wuhan	1.69%	8400	Hubei	Second
Wuhu	-1.61%	5752	Anhui	Third
Wuxi	-0.46%	8191	Jiangsu	Second
Xi'an	-0.18%	6679	Shaanxi	Second
Xiamen	-0.39%	21461	Fujian	Second
Xiangtan	0.51%	3971	Hubei	Second
Xining	-0.61%	5914	Qinghai	Third
Xinxiang	0.56%	4143	Henan	Third
Xuzhou	0.74%	5749	Jiangsu	Second
Yancheng	-1.32%	5538	Jiangsu	Third
Yangzhou	0.41%	8782	Jiangsu	Third
Yantai	0.16%	6399	Shandong	Second
Yichang	1.43%	5403	Hubei	Third
Yinchuan	-0.49%	5030	Ningxia	Third
Yingkou	0.20%	4554	Liaoning	Third
Zhangjiagang	0.84%	8553	Jiangsu	Third
Zhanjiang	2.59%	6962	Guangdong	Second
Zhengzhou	0.54%	9173	Henan	Second
Zhenjiang	-0.53%	6556	Jiangsu	Third
Zhongshan	-0.05%	5996	Guangdong	Second
Zhuhai	0.74%	13236	Guangdong	Second
Zhuzhou	-1.12%	4691	Hunan	Third
Zibo	-1.12%	5662	Shandong	Third

Among the ten cities with the biggest gains in home prices, three were first-tier cities, another three were third-tier cities, and four were second-tier cities.

In China’s ten biggest communities, in addition to Guangzhou, both Chengdu and Chongqing in western China saw prices fall, at 0.42 percent and 1.05 percent respectively. The other top ten cities all reported rising prices.

On a year-on-year basis new home prices fell 1.38 percent in July, improving from a decline of 2.70 percent in June, according to the Academy’s report.

Stock Market Crisis Fails to Deter Housing Recovery

Although the gyrations in China’s stock market have seized public attention during late June and into July, there doesn’t seem to be clear evidence of the turbulence having an impact on the housing sector.

According to some analysts, last month was the worst on record for China’s stock markets with the Shanghai Composite Index falling a total of 15 percent despite large levels of state intervention to avert a freefall in share prices.

By contrast, the housing market stayed relatively stable. “Confidence in the property market is improving steadily and we expect continuous growth in sales and prices,” Soufun analysts noted in the report.

The stock market crisis also has not yet driven large numbers of investors into housing as a safe haven. The total sales of new homes declined 5.5 percent in July compared to June, according to another study released by a unit of E-House China. However, the figure for sales volume was still 44.2 percent higher than the same period in 2014, when the country’s was in the depths of its housing doldrums.