Chinese House Prices Rise Again as Government Clamps Down

The Chinese government will not be happy at the latest round of data to be released by the country's largest real estate website SouFun...

The Chinese government will not be happy at the latest round of data to be released by the country's largest real estate website SouFun, which found that Chinese house prices had posted their biggest rise in over a year in June.

According to SouFun house prices rose 0.3 percent on the month to 8,717 Yuan ($1,369) per square meter (10.76 square feet), based on its survey of 100 cities. This is the second monthly gain recorded by the site and the biggest rise since June 2011.

Sales were also up in June. According to the statistics bureau, home sales increased by 41% on the month.

"It is very clear that China's property market is coming back," said Vincent Mo, Chairman of SouFun, told Bloomberg Television today. The back-to-back monthly gain "showed the turning-point of China's property prices," he said.

But this is exactly the opposite of what the government wants. Just last week, a statement from the Ministry of Land and Resources said that not only should local authorities avoid easing up on the restrictions; but that they must also revoke any loosening they have already actioned. This week the official Xinhua News Agency reported that Premier Wen Jiabao has said that China will "unswervingly" restrict the market to keep prices from rebounding. The report cited a government meeting held on July 26.

According to a statement on the central government website last week, teams were sent to 16 provinces late last month to check on the implementation of its property curbs. The nationwide check is aimed at "firmly" restraining property speculation and consolidating result of the curbs, it said. 

- Thursday 02 August 2012

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