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New Home Prices: Moderate Increase in June

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Impressive construction site in Tianjin, northern China
Impressive construction site in Tianjin, northern China

The recovery of the housing sector is still ongoing in China but at a slower pace in June, with fewer cities showing an increase in new home prices compared with the previous month, according to figures released on Monday by the National Bureau of Statistics.

Out of the 70 medium and large cities, 55 recorded a rise in new home prices last month, compare to 60 in May, said the NBS. In addition, 10 cities showed a decline in prices, against 4 in May.

New home prices surged 48.4% year on year in the southern city of Shenzhen last month, the most significant increase among all major cities but lower than the 54% rise recorded in May. Shanghai, Beijing and Guangzhou home prices are respectively up 33.8%, 22.4% and 19.5% year on year. Jinzhou, a second-tier city located in northeastern China, experienced the largest decrease year on year with 3.5%.

Regarding the existing homes, prices rose in 48 cities fell in 14 cities in June compare to the previous month, against 49 and 13 in May.

After over a year of price cooling, the Chinese real estate market began to recover in the second half of 2015, thanks to government support measures, including a decrease in the interest rate and the deposit.

However, cities are not equal before the recovery: in developed regions, the rise in prices was very noticeable while a considerable amount of properties are still unsold in less developed areas. This contrast has prompted local authorities to use different methods: Shenzhen and Shanghai have stepped up measures to curb speculation and contain the risks of bubbles, while smaller cities are exploring new ways to boost house sales.