Big cities lead China home prices in July

New home prices in the mainland rose in almost all cities in July, led by gains in the biggest metropolitan centres, amid expectations that the government would not further tighten property market restrictions.

Prices climbed in 69 of the 70 cities the government tracked last month from a year earlier, the National Bureau of Statistics said in a statement yesterday, matching the data in June and May.

The southern business centre of Guangzhou posted the biggest gain, rising 17 per cent from a year earlier. Prices in Beijing and Shanghai increased 14 per cent each. All three cities had their biggest gains since the government changed its methodology for the data in January 2011.

"It's unlikely that the government will release a new round of property curbs, even if home prices continued to rise rapidly. The new leadership seems to have a different mentality on property policies," said Jack Gong, a Hong Kong-based property analyst at Orient Finance Holdings.

"The new government may be less interested in tightening measures but allow the market to play a bigger role."

China will seek "stable and healthy" development of the property market, the government said on its website after a meeting led by President Xi Jinping last month.

The government may release a "long-term mechanism" for stable and healthy development in about three months, Xinhua reported on Thursday, citing Zhu Zhongyi, the deputy head of the China Real Estate Industry Association.

China in March stepped up a three-year campaign to cool home prices, with only the capital city of Beijing issuing the toughest measures among 35 provincial cities.

Beijing became the only region to raise the minimum down payment on second homes from 60 per cent and to enforce a 20 per cent capital-gains tax on existing homes.

Existing home prices rose 15 per cent in Beijing last month from a year earlier and increased 11 per cent in Shanghai and Guangzhou each, according to the data. Some smaller cities have already begun easing some of the policies designed to restrain price gains.

The eastern city of Wenzhou is "fine tuning" its home purchase restriction policies by allowing second home purchases by qualified local residents, Xinhua reported on Thursday, citing a local housing bureau official.

Yancheng, in Jiangsu province, suspended limits on housing prices as the supply of homes increased, People's Daily reported on July 23.

Wenzhou, the only city with a decline among the 70 cities the government tracked, saw new home prices fall 2.4 per cent last month from a year earlier, according to the data.