China: House prices increase at fastest pace in nearly two years in August
House prices in 70 large- and medium-sized cities rose 1.4% in August in month-on-month terms according to a weighted average index calculated by Thomson Reuters from data issued by the National Bureau of Statistics (NBS). The print was up from July’s 1.1% increase and represented the highest reading since October 2016. According to the NBS, the sale prices of newly constructed residential buildings increased in 67 cities (65 in July).
House prices rose 7.0% annually in August, up from a 5.8% increase in July. Annual average growth in house prices, however, fell to 5.4% in August from 5.5% in July, marking the lowest rate since October 2016.
August’s print suggests that the recent round of policy easing implemented by Chinese authorities is adding upward pressure on real estate prices. Against this backdrop, analysts are divided about future policies regarding the real estate market: While some analysts foresee that the government will introduce tightening measures in the property market in an attempt to prevent a surge in prices, others expect that the government will rely on the housing market to shore up overall economic growth amid the ongoing trade war with the United States.