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, Reuters reports.
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 percent in August from a month earlier, higher than July’s reading of 1.1 percent, Reuters calculated from an official survey published on Saturday.
That marks the fastest gain since September 2016, and the 40th straight month of price increases, Reuters 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.
In a sign of broadening market strength, 67 out of the 70 cities surveyed by the National Bureau of Statistics (NBS) reported a monthly price increase for new homes, up from 65 in July. Only one city - Xiamen in the south - had an actual price decline.
Compared with a year ago, new home prices climbed 7 percent, speeding up from July’s 5.8 percent rise, the NBS data showed.
“Property price gains this year are due to looser credit and the delayed effect of strong government stimulus introduced in previous months to reduce inventories, which will slowly kick in,” said Nie Wen, an analyst at Hwabao Trust.
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.