China’s new home prices grew at the fastest clip in 22 months in July, despite efforts by authorities to cool off the property market. The overall rate of increase in 70 cities surveyed by the government was 1.21 per cent in July from the previous month. That was the highest rate of increase since September of 2016, when the month-on-month increase was 1.8 per cent, according to analysis by Bloomberg of data released on Wednesday by the National Bureau of Statistics. Homebuyers faced higher prices in a record 65 cities of the 70 surveyed cities in July over the previous month. That surpassed the previous record of price jumps in 63 of the 70 cities in June, according to the statistics bureau. Why China’s property market won’t crash for now All first-tier cities posted month-on-month price gains in July except for Shanghai, where prices edged down 0.1 per cent. Prices also slipped in Nanjing and Quanzhou, and remained flat in Tianjin and Xiamen. The biggest month-on-month increase was recorded in Sanya in Hainan Island, sometimes called “China’s Hawaii” because of its luxury resorts, beaches and coral reefs. Prices in Sanya jumped 3.7 per cent in July from the month before. Jinan, the provincial capital of Shandong, recorded the second-biggest jump, at 3 per cent over June. “Third-tier cities, whose housing stock is at a multi-year low, drove this round of price growth. It is expected that these cities will introduce more curbs and land supply in coming months to cool off the market,” said Yan Yuejin, an analyst with E-house China R&D Institute. The heated residential property market prompted a stern statement from the Communist Party Politburo last month. It told local governments to “curb home price increases”, a shift from its past instruction to “curb home prices from rising too fast”. Property sales in value and area terms grew in July, recording year-on-year growth of 22 per cent and 9.9 per cent, respectively. New housing starts jumped to 29.4 per cent in July over the previous year, the highest increase since October 2014. Developers’ funding reached a 2018 high of 17.8 per cent growth, according to data released by the NBS on Tuesday. Why China cannot rely on consumers to spend their way out of the trade war The robust data in the property sector starkly contrasts with other sectors in the Chinese economy, which, according to other NBS data, showed weakening. Sales at 50 major Chinese retailers fell by 3.9 per cent in July from a year earlier, an acceleration of a decline since April. “Land acquisition and investment data beat expectations, which suggests developers’ high willingness to replenish their stock,” said Chen Shen, a property analyst with China Securities Co.“We don’t expect that policy to ease any time soon. The big variable is whether the borrowing rate will go down.” China’s developers rise on reports of Shanghai cutting first-home mortgage rates Spotlighting how sensitive mortgage policy in China can be, two major state-owned banks in Shanghai reportedly cut their mortgage rate last week – and then quickly the next day rescinded it after intense market reaction. The Ministry of Housing and Urban-Rural Development has called three conferences in less than 20 days to urge local officials to stabilise home prices, and warned that officials would be held accountable if they failed to control local home prices.