Fuelled by improved sales and market sentiment, Chinese home prices rose for a third straight month, in July.
In a rare counterpoint to a recent list of grim economic indicators, there is hope suggesting that the property market is slowly recovering.
Average new home prices rose 0.3% in July, 0.4% in June, according to National Bureau of Statistics(NBS) data released on Tuesday, 18 Aug.
Even a mild recovery in one of China’s key sectors would invaluably boost the economy which has been heading towards its weakest growth in 25 years.
Policy tweaks and increased lending helped fuel a wave of pent-up home buying in recent months, but a large overhang of unsold houses in smaller cities keeps the sector under pressure.
China’s largest property developer Vanke said on Monday that the housing market is slowly emerging from a year-long slump, but it will take time to see a full recovery.
"The number of land acquisitions has decreased, and inventory is slowly being digested. It'll take time, but it's confirmed that a recovery is ongoing," said Vanke President Yu Liang.
The NBS data showed home prices across China rose month-on-month in 31 of the 70 major cities monitored, up from 27 in June.
Prices in first-tier cities such as Beijing, Shanghai and Shenzhen have been leading the recovery.
Shenzhen was the top performer, with the fourth consecutive month of rebound, up 23.6% in July from a year ago, following a 15.7% rise in June.
The capital city Beijing rose 1.0% last month from a year earlier, reversing June's drop of 1.1%.
Shanghai's home prices were up 3.1% in July from a year ago, compared with a year-on-year rise of 0.3% in June.
Beijing has stepped up curbs on property market speculation after prices surged in one area of the capital, raising concerns some bigger cities may also tighten home purchase rules.
China's real estate investment growth continued to slow in the first seven months of 2015, but property sales and housing investment improved, indicating a mixed recovery in the struggling house market.
Compared with a year ago, home prices were still 3.7% lower in July.
Source: Straits Times