China’s home prices rebound (Lead)

July 18th, 2012 - 2:48 pm ICT by IANS  

Beijing, July 18 (IANS) More major cities in China saw home prices rise in June as compared to May, as the country’s property sector has showed signs of warming following government efforts to stimulate the slowing economy, official data showed Wednesday.

In June, 25 cities, drastically up from six in May, out of a statistical pool of 70 major cities, recorded higher new home prices than in the previous month, the National Bureau of Statistics (NBS) said in a statement.

Twenty-one cities saw drops in new home prices last month, down from 43 in May, while prices in 24 cities remained the same, reported Xinhua citing NBS data.

It marked the first time since September 2011 for the number of cities with price increases to exceed the number of cities that experienced drops, although the rises in the 25 cities were all less than 0.6 percent.

“China’s efforts to control the property sector are still in a crucial stage and the task remains arduous,” said Ma Xiaoming, a senior NBS statistician.

He attributed the price rises to recent interest rate cuts implemented by the government to bolster the economy and the altering mindset of home buyers who expected the market to warm up.

China has tightened its curbs on the property sector since 2010 as home prices rocketed beyond the reach of average wage earners.

The government has restricted home purchases in several cities while requiring higher down payments and introducing property taxes. The clampdown has since cooled the market gradually.

On a year-on-year basis, new home prices continued the downward trend, with 57 cities out of 70 seeing prices decline in June, expanding from 55 in May, the NBS data showed.

New home prices in 11 cities increased in June from a year earlier by less than 1.2 percent, compared with 15 cities in May.

Despite month-on-month rebounds in some cities, the government’s property controls have produced obvious results and effectively curbed the rising momentum of home prices, Ma said.

He urged continuing the property controls and making it a long-term policy to curb speculative and investment demand.

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