Real estate prices recover in 61 Chinese cities on a monthly basis

Real estate prices rose on a monthly basis in June in most Chinese cities as the housing market showed signs of recovery and analysts estimate that the sector would mostly remain stable in the second half of the year, thanks to the central government's principle of "housing is for living in, not speculation".

Home prices rose in 61 of the 70 major cities tracked by the National Bureau of Statistics in June, four more than that of May (57), according to data published by the bureau on Thursday.

Yinchuan in the Ningxia Hui autonomous region saw the maximum price growth, with new home prices rising by 1.9 percent on a monthly basis and 15.7 percent on an annual basis.

New home prices in the four first-tier cities rose by 0.6 percent on a monthly basis, with Shenzhen recording the maximum growth of 0.8 percent, Guangzhou by 0.6 percent, Shanghai by 0.5 percent and Beijing by 0.4 percent on a monthly basis.

"The data show that home prices have started to recover," said Yan Yuejin, director of the Shanghai-based E-house China Research and Development Institution.

"The steady progress in business resumption helped sustain the demand for home purchases in June. In addition, the local governments' efforts to maintain market order and balance supply and demand according to the market conditions helped stabilize the residential property market," said Kong Peng, chief statistician of the NBS.

Fifty out of the 70 cities saw growth in the prices of pre-owned homes, nine more than the 41 seen in May. Shenzhen saw the fastest increase of 1.9 percent in the transaction prices among first-tier cities. The southern Chinese city announced on Wednesday a slew of tightening measures including tighter eligibility requirements for homebuyers, hike in down payments and an increase in the transaction tax.

"Tighter home purchase restrictions will curb investment and speculation and help stabilize the real estate market," said Yang Kewei, an analyst with China Real Estate Information Corp.

Xu Xiaole, chief market analyst with the Beike Real Estate Research Institute, expects similar policies to be announced by local governments in cities that have seen rapid growth in property prices.

"Despite corresponding changes in local measurements in case a city's home prices show signs of overheating, I think stability will continue to be the key word for real estate sector in the second half of the year," said Chen Sheng, president of the China Real Estate Data Academy.

"Ultimately, all the measures are intended to protect the homebuyers who purchase houses for residential purposes," said Xu.