China’s housing-price growth accelerated in July, especially in larger cities, as liquidity conditions improved after a short-lived credit crunch in June.
Prices of homes included in a survey of 100 Chinese cities were up 7.9% from a year earlier, after a 7.4% gain in June, data provider China Real Estate Index System said late Wednesday. Month-on-month price rises quickened to 0.87% from June’s 0.77% gain.
Consumer expectations that Beijing would hold off on further property curbs amid a slowing economy contributed to the acceleration in month-on-month price gains, particularly in larger cities such as Beijing and Guangzhou, CREIS said.
Despite a government campaign to keep prices from spiraling higher, prices rose for the eighth month in a row compared with a year earlier and for the 14th consecutive month compared with the previous month. China’s central government has kept tightening measures—including curbs on multiple home purchases and restrictions on credit to buyers and developers alike—in place since 2010 in a bid to head off resentment and possible social unrest due to a lack of affordable housing.
Still, fewer of the smaller cities posted price gains during the month, a likely result of overbuilding in some areas. Of the cities covered in the survey, 61 showed higher month-over-month prices, compared with 71 cities in June.
“This shows that the housing-price gap [has widened] further between major and smaller cities,” said Jinsong Du, an analyst at Credit Suisse. “This should continue to prevent the central government from implementing nationwide housing measures in the near term.”
Housing transactions picked up significantly toward the end of July, and this is likely to expand further in August and September, Mr. Du said, citing conversations with property developers.
CREIS said the average price of residential housing climbed to 10,347 yuan ($1,688) a square meter during the month, up from 10,258 yuan in June.
Quanzhou in southern China’s Fujian province had the fastest month-over-month rise, posting a gain of 4.5%. In Beijing and Guangzhou, home prices rose 2.5% and 2.1%, respectively.
In a separate index, new-home prices of 288 cities tracked by real-estate-services provider E-House China showed a rise of 0.84% in July from June, up from June’s 0.40%. On a year-over-year basis, new-home prices in July rose 11.4%, up from June’s 4.2%, according to this survey.
The higher housing prices also came alongside gains in land prices, which are seen as contributing to future housing costs. Data from the Ministry of Land and Resources showed the average price of residential land from 105 cities surveyed was 4,799 yuan a square meter in the second quarter this year, up 2.1% from the previous quarter.
The price gains shown in these two housing surveys appear to be tolerable for the government, and the policy environment for the property sector will continue to be benign in the coming months, analysts said. They noted that the latest statement by the Communist Party’s powerful Politburo hinted that policy makers may take a more accommodative stance toward the property market in the months ahead.