China's home prices continue to rise in July

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China's home prices continue to rise in July

(Xinhua) 08:19, August 19, 2013

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Photo taken on July 17, 2013 shows buildings in downtown Shanghai, east China. According to the National Bureau of Statistics, of 70 major Chinese cities, 62 saw month-on-month new home price rises in July. Meanwhile, 57 cities reported month-on-month price gains in existing and second-hand homes. (Xinhua/Chen Fei)

Prices of both new and existing homes continued to rise in most Chinese cities in July, according to official data released on Sunday.

Of a statistical pool of 70 major Chinese cities, 62 saw month-on-month new home price rises, down from 63 in June, the National Bureau of Statistics (NBS) announced.

According to the bureau, 57 cities reported month-on-month price gains in existing and second-hand homes in July compared to 55 in June, lower than the 64 increases in May.

On a year-on-year basis, new home prices rose in 69 cities last month, the same as the June figure, while 67 reported higher year-on-year prices for existing homes in July, down from 68.

Overall, home prices have been rising in most cities due to higher demand and rising land prices, said a senior statistician with the NBS.

But the month-on-month growth rate narrowed in July and only 12 cities reported month-on-month new-home price growth above 1 percent in July, eight less than the figure in June.

Shenzhen, Shanghai and Beijing saw month-on-month new-home price growth rate narrow by 0.8 percentage point, 0.3 percentage point and 0.2 percentage point respectively.

For existing home prices, 25 cities had a lower month-on-month growth rate in July and only one city reported month-on-month growth rate above 1 percent, as opposed to two in June.

The data covers the nation's large and medium-sized cities, including Beijing and Shanghai, provincial capitals, and other municipal cities.

The property market has been rising in the first seven months, following its rebound in the second half of 2012, said Zhu Zhongyi, vice president of the China Real Estate Industry Association.

Runaway prices led the government to issue guidelines in March to tighten control of the real estate sector, including higher transaction taxes, restrictions on purchases of multiple homes and higher down payments.

But the guidelines did not halt the surge in property prices.

Shen Jianguang, chief economist with Mizuho Securities, said only through measures like real estate registration and property taxes can the appreciation expectation on property be reduced and local governments find more revenue sources with less reliance on selling land-use rights.