China July new home prices rise fastest in two years

New home prices in China during the month of July rose at the fastest pace in two years, but stalled in more cities than that in June, adding concern that the world’s second-largest economy is losing steam but offering some relief for policymakers worried about property bubbles.

New-home prices excluding government-subsidized housing gained in 51 cities last month, from 55 in June, among the 70 the government tracks, data released by the National Bureau of Statistics showed Thursday. Prices dropped in more cities for a fourth consecutive month, declining in 16, compared with 10 a month earlier. However, they were unchanged in three cities.

Further, in top tier cities, the gains were much larger, with Beijing new home prices jumping 20.7 percent in July, up from 20.3 percent in June. In Shanghai, new home prices rose 27.3 percent in July, up from June's 7.3 percent.

On the other hand, housing data from the private sector witnessed a mixed bag. Prices in July gained in 66 cities among the 100 tracked by SouFun Holdings Ltd., the owner of China’s biggest property website, seven fewer than in the previous month. Average new-home prices rose 1.63 percent, quickening from the 1.3 percent pace in June.

The average new-home price rose 0.7 percent in July from June, broadly in line with the 0.71 percent increase in the previous month, according to Bloomberg projections based on government data. And, out of the 70 cities surveyed, prices fell on a monthly basis in 19 cities in July, compared to 15 in June.

In Shanghai, prices climbed 1.4 percent, and they increased 2 percent in the southern business hub of Shenzhen from a month earlier, both at a slower pace after the cities unveiled curbs in March designed to rein in soaring home values and deter speculative purchases. They rose 1.7 percent in Beijing and 1.3 percent in the southern city of Guangzhou.

The value of homes sold rose 26 percent in July from a year earlier, according to Bloomberg calculations based on data the National Bureau of Statistics released on Aug 12. That compared with a 22 percent increase in June and was down from a year-on-year gain of 71 percent recorded in March.

Meanwhile, a large number of large affluent cities have tightened home purchasing restrictions in recent months, following the sharp rise in prices in recent months. However, cities that have seen the biggest drop in prices include Dandong and Mudanjiang, situated respectively in China's rustbelt Liaoning and Heilongjiang province.