After several months of sporadic reports indicating that Chinese property prices may be going back up, and intense debate over how the government would react, in July it begins to look even more like we will very soon find out the answer to the latter.
This is because the government house price data is now coming in positive. According to the National Bureau of Statistics Chinese house prices grew by an average 0.1% in July, following a similarly small growth in the previous month leaving prices 1.5% down on the year. The index also found prices up in 49 out of 70 cities in July, compared to 25 out of 70 cities in June.
"A new trend does appear to be materializing as home prices continue on an upward trajectory after the Chinese government began to loosen certain levers to address concerns around a slowing economy," Mark Budden, China area leader at consultancy EC Harris, said in a note after the data.
"It's still a little premature to label the slowdown over as certain macro-economic factors could yet threaten this recovery and, if the market does begin to heat up again, the central government is likely to step in to curb speculation," he added.
The central government has made no bones about the fact that it is not ready to see prices growing again yet, and most analysts are in agreement that it will step in with new cooling measures if prices begin to see any real growth. Some are hopeful that the slowdown in the wider economy will prevent Beijing from clamping its jaws back around the property market, but the government statements continue to show real iron behind keeping property prices going down. We will probably find out soon enough.
- Thursday 23 August 2012