Growth in Chinese home prices accelerates to two-year high
China’s home prices accelerated in August at the fastest pace in nearly two years, a sign that Beijing’s efforts to boost a slowing economy may once again be heating up frothy real estate markets.
While solid growth in the sector could cushion the impact of a vigorous multi-year government crackdown on debt and escalating trade tensions with the United States, it could also stoke fears of a bubble.
Average new home prices in China’s 70 major cities rose 1.4 per cent in August from a month earlier, higher than July’s reading of 1.1 per cent.
That marks the fastest gain since September 2016, and the 40th straight month of price increases, calculations show, despite tougher curbs designed to rein in a near-three-year real estate boom that has spilled over from megacities to the hinterland.
Compared with a year ago, new home prices climbed 7 per cent, speeding up from July’s 5.8 per cent rise, data showed.
Chinese policymakers have rolled out a flurry of measures to support growth this year, including cutting the amount of cash that some banks must hold as reserves several times to boost lending to smaller businesses.
China’s four biggest cities – Beijing, Shanghai, Shenzhen and Guangzhou – posted an average monthly price gain of 0.3 per cent, compared with an increase of 0.2 per cent in July.
While many property analysts believe authorities will be more cautious about stimulating property investment than in past downturns, some suspect additional funds will inevitably flow into the market as investors look for opportunities.