Chinese Housing Market Maintains Strong Performance for a Third Consecutive Month
The Chinese housing market has kept its satisfactory performance in August with average property prices in 70 Chinese cities rising for a third consecutive month. The once-ailing market recovered in June following an unfortunate eight-month long decline. The recent gains are more than welcome for investors looking for bright spots in the currently anaemic Chinese economy.
According to Dow Jones Newswires’ calculation, prices in some 70 cities rose by 0.05 percent on average in August from July, compared with a 0.13 percent increase in July and 0.02 percent in June.
According to the data released, the gains were mainly due to real estate agents boosting sales to first-time home owners and upgraders. The major cities such as Beijing, Shenzhen and Chongqing registered marginally higher prices of the newly built homes in August compared to the previous month.
The new economic data, which was released by the National Bureau of Statistics, poses a challenge for the government, which is trying to boost its ailing economy while at the same time diminish the threat of unsustainably high housing prices. For more than two years Beijing has been running an aggressive campaign to battle housing prices via the imposition property tightening measures in a number of cities. The first signs of a turnaround in the government’s policy came in February, when Beijing decided to support first-time home buyers as a part of its efforts to revitalize the Chinese economy.
According to Tim Condon, the ING economist, it is highly unlikely that there will be any softening of the housing policy on Premier Wen Jiabao’s watch. The only hope for housing prices to keep their rally will come from Jiabao’s successor – Vice Premier Li Keqiang, who will take over in March next year.
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