House prices still edging up, but at a slower rate

The average house price in China's largest cities has seen continuous but slight growth for the last three consecutive months, according to a survey released Monday by China's leading property research organization.

A survey of 100 of the nation's major cities, conducted by the Beijing-based China Index Academy, found that the average house price in August was 8,738 yuan ($1,377) per square meter, 0.24 percent higher than in July.

This compares to a month-on-month increase of 0.33 percent in July.

Experts predicted that most cities in China would not see significant growth in average house prices during the next two months, even though it is traditionally considered to be the best period for home sales in China.

In September and October, the house supply will exceed national demand as large amounts of new properties will be available, Yin Bocheng, director of the real estate research center at Shanghai-based Fudan University, told the Global Times Monday.

"Most of the house sellers will focus on how many units they sell rather than on prices, so it is unlikely there will be much growth in the average house price around the nation," said Yin.

Furthermore, potential homebuyers are likely to hold a wait-and-see attitude over the next two months as the government is expected to further tighten regulations for the real estate market, said Chang Qing, a real estate analyst at Beijing-based property brokerage Homelink.

Influenced by rumors of more regulations for the property market, such as a more widely applied property tax, consumers will take longer to make their purchase decisions, so the companies will not dare to increase the prices, Chang told the Global Times Monday.

According to news posted on its official website by the Ministry of Land and Resources on August 20, Central China's Hunan and Hubei provinces are developing plans to impose a property tax. The notice was later taken down, but rumors of the tax have not gone away.

Some local governments still hope to boost the local economy by loosening regulations for the regional real estate market, going against the will of the central government, Yin noted. "This is the main reason for the price increase in the last three consecutive months."