China: House prices expand at record rate in August
September 18, 2016
House prices in 70 large- and medium-sized cities rose 1.5% in August over the previous month, according to a weighted average index calculated by Thomson Reuters from data issued by the National Bureau of Statistics (NBS). The print exceeded the 0.8% increase observed in the previous month and represented the strongest growth since records began in January 2011. According to the NBS, the sale prices of newly-constructed residential buildings declined in 4 cities, increased in 64 cities and remained flat in 2 cities.
Compared to the same month last year, house prices jumped 9.2% in August. The print came in above the 7.9% increase recorded in July and thereby marked the fastest expansion since January 2014. Annual average variation in house prices rose from 3.2% in July to a 22-month high of 4.2% in August, continuing the upward trend in prices since May 2015.
Ample liquidity and rather relaxed real estate policies in most cities, coupled with policy stimulus at the start of the year, are behind the recent rally in house prices. Against this backdrop, some cities have started to unveil measures to cool down the property market. For example, Hangzhou will not allow those who are not registered in the city to buy properties in some districts starting on 19 September.