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China home prices rise most in 10 months, more curbs imposed

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China home prices rose at the fastest pace in 10 months in June, prompting some local authorities to roll out fresh housing curbs.

[BEIJING] China home prices rose at the fastest pace in 10 months in June, prompting some local authorities to roll out fresh housing curbs.

New-home prices in 70 major cities, excluding state-subsidised housing, increased 0.58 per cent last month, National Bureau of Statistics data released Thursday showed.

Values in the secondary market, which is largely free from government intervention, gained 0.31 per cent, the biggest rise in 11 months.

Property prices have rebounded as the central bank loosens credit to support an economic recovery from the coronavirus shutdown. Frenetic buying is increasingly taking place across large and medium cities, where properties are seen as a safe place to store wealth.

The value of home sales reached a monthly record of 1.84 trillion yuan (S$365.44 billion) in June, Bloomberg calculations show, as developers offered more projects to boost first-half results.

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Policy makers are responding quickly, rolling out fresh curbs to cool demand. Earlier this month, authorities in Ningbo raised eligibility requirements to buy a property. Tech hub Shenzhen imposed harsher curbs on Wednesday, raising the bar for first-time buyers.

"The government wants to exclude property from their credit easing, and has been reacting fast to any sign of a housing bubble," Nomura Holdings property analyst Leif Chang said before the data was released. "We expect home-price growth to slow in the third quarter."

For the full year, Nomura forecasts average nationwide house-price growth of 3 per cent. However, performance may diverge heavily between large and small cities, as some economically weaker towns still see subdued sales, according to China Real Estate Information.

Prices rose in all large and medium-sized cities in the survey. Growth was most evident in so-called tier 2 cities, mostly regional centres, with values rising 0.71 per cent.

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