China’s home prices rise at fastest rate for 2 years
Sixth consecutive monthly acceleration points to likelihood of further government restrictions to keep housing affordable
China’s home prices rose at their fastest pace in almost two years in August, adding to the likelihood of more government tightening in the housing market.
New-home prices gained 1.49 per cent from the previous month, according to Bloomberg calculations based on data for 70 cities released by the National Bureau of Statistics on Saturday. That compared with a 1.2 per cent increase in July. It was the sixth straight monthly acceleration.
Of the 70 cities, the biggest month-on-month price increase in August was a 3.4 per cent gain in Wuxi, the data showed. In Beijing, where more tightening was announced on Thursday, prices were unchanged; in Shanghai, they were up 0.1 per cent.
The government is likely to maintain property curbs, based on fears that any relaxation will lead to another round of price surges, Haibin Zhu, the chief China economist at JPMorgan Chase, said ahead of the data. Officials are seeking to keep housing affordable and limit the risk of destabilising bubbles.
“The government worries a lot,” Zhu said in an interview in Hong Kong. “At this stage, there’s no intention to relax the housing tightening.”
For Zhu, the biggest worry in the housing sector is the diminished role of market forces in pricing and sales, as the government’s “temporary” administrative restrictions become permanent.