Guangzhou leads surge in China housing prices

New home prices in the mainland's four major cities rose the most since January 2011 last month, led by a 19 per cent jump in Guangzhou, as the government refrains from imposing further curbs to cool the market.

Beijing and Shanghai prices climbed 15 per cent from a year earlier, while in Shenzhen they gained 18 per cent, the National Bureau of Statistics said.

Prices rose in 69 of 70 cities tracked by the government, the same as in July.

Premier Li Keqiang has no additional measures to rein in property prices since predecessor Wen Jiabao in March ordered the People's Bank of China to raise down payment requirements for second mortgages in cities with excessive cost gains.

Thirty-five cities have set annual home-price targets this year, mostly capping gains at the growth rate of disposable incomes. "The government is unlikely to take strong action nationwide to curb the property market as that may damp economic growth," said Zhu Haibin, the chief China economist of JP Morgan Chase in Hong Kong.

"But local governments should come up with their own property policies by tightening in major cities and making some adjustments in smaller ones that have too much housing supply."

Four major cities had their biggest gains since the government changed its data methodology in January 2011. For the fourth month, Wenzhou was the only one to post a fall, with prices down 2.1 per cent from last year.

The rally in major cities would probably continue because September and October were the traditional peak season for property sales, Zhu said.

Existing home prices rose 16 per cent in Beijing last month and 11 per cent in Shanghai and Guangzhou, according to data.

Private data shows rising housing values. Home prices jumped 8.6 per cent last month, the biggest gain since December last year, according to SouFun, a real estate internet site.

A rally in the land market also fuelled home prices, it said.

A residential land parcel in Beijing sold at a record 73,000 yuan (HK$92,000) per square metre this month, while Sun Hung Kai Properties, Hong Kong's biggest developer by market value, bought a site in Shanghai for 21.8 billion yuan in an auction, a record price.

Sunac China yesterday bought a commercial and residential site in Tianjin for 10.32 billion yuan or 10,109 yuan per square metre, the city's most expensive in terms of lump sum.

The 374,017 square metre site could yield a total gross floor area of 1.02 million square metres. About 55 per cent is for commercial use and 43 per cent is residential. Gao Fei, of Centaline (China) in Tianjin, said: "The price is reasonable as the site is near the city centre."

Additional reporting by Yvonne Liu