Rebound in demand, easier monetary policy lift sector
Prices of new and existing homes in China's large and medium-sized cities gained ground last month as the government's easier monetary policies kicked in, the National Bureau of Statistics (NBS) said Tuesday, suggesting a sustained recovery.
Prices of new homes (excluding subsidized units) posted a month-on-month increase in 31 of the 70 cities monitored in July, compared with 27 cities in June, the NBS said.
Another 29 cities recorded month-on-month price drops in July, it said.
Data released by the NBS showed that new home prices rose in all of the first-tier cities with Shenzhen gaining the most, up 6.3 percent month-on-month, and Shanghai in last place, up 1.9 percent from June. The other first-tier cities are Beijing and Guangzhou.
The vast majority of second-tier cities witnessed slight month-on-month price increases as well, while most third-tier cities saw price drops in July.
For existing homes in July, prices climbed in 39 cities and fell in 18, leaving 13 cities flat. Shenzhen followed by Beijing and Shanghai rose most, gaining 5.3 percent, 2.6 percent and 1.6 percent, respectively, on a monthly basis. In June, existing home prices rose in 42 cities and fell in 20.
"A rebound in property demand as well as easy monetary policies have contributed to a warming-up in the property market," Xu Gao, chief economist at Everbright Securities Co, told the Global Times Tuesday. "The recovery will continue."
Commercial housing sales reached 599.14 million square meters in the first seven months, up 6.1 percent year-on-year, according to data released on August 12 by the NBS.
The central bank has launched four rounds of benchmark interest rates cuts since November and two rounds of overall banks' reserve requirement ratio cuts this year amid the continued economic slowdown.
Xu forecast that the government would maintain easy monetary policies to boost the property market, a key factor in stabilizing the economy.
On a yearly basis, new home prices fell in 67 cities while rising in only three including Shenzhen, Shanghai and Beijing. Shenzhen jumped the most, recording 24 percent year-on-year growth. For existing homes in July, 65 cities witnessed year-on-year price declines while five saw prices increase on a yearly basis.
China's property market has been weakening since 2014 caused by falling demand and strict restrictions on the sector.
