Home prices in China rose to over a period of six-month high during August, defying government’s efforts to limit a housing bubble.
New-home prices, excluding government-subsidized housing, in August gained in 64 of the 70 cities the government tracks, compared with 51 in July, data released by the National Bureau of Statistics showed Monday. Prices fell in four cities, compared with 16 a month earlier, and were unchanged in two.
Average new-home prices in the 70 cities rose 1.2 percent in August from July, the biggest increase since January 2010, according to Bloomberg calculations based on the government data. The value of home sales jumped 33 percent last month from a year earlier, the fastest pace in four months.
The highest rise in house prices were noted in Zhengzhou, by 5.6 percent and the steepest declines were seen in Urumqi and Shaoguan, by 0.3 percent. Compared with the same month of last year, house prices grew in 62 cities out of the 70 cities in August, while it dropped in 6 cities.
In addition, prices climbed a record 4.4 percent and 3.6 percent in Shanghai and Beijing respectively, taking the year-on-year gains to 31 percent and 24 percent. On the other hand, home prices climbed the fastest in regional hubs where local authorities haven’t introduced curbs, with Zhengzhou, the provincial capital of central Henan province, leading the list with gains of 5.5 percent increase, up from a 2 percent gain in July.
"Chinese authorities are facing a monetary policy dilemma amid rapid home-price growth. The overall monetary policy should remain accommodative as inflation remains subdued and growth is still trending down. However, concern about an asset bubble will limit room for further easing," Bloomberg reported, citing, Zhou Hao, Economist, Commerzbank, Singapore.


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