More Chinese cities see home prices rise

BEIJING - More Chinese cities saw home prices rise in October from September despite the government's dogged efforts to curb property prices, data from the National Bureau of Statistics showed Sunday.

In October, 35 cities, up from 31 in September, out of a statistical pool of 70 major cities recorded higher new home prices than a month earlier, the data showed.

On a month-on-month basis, new home prices in 17 cities fell in October, down from 24 in September, while those in the other 18 cities remained unchanged, the data showed.

On a year-on-year basis, more cities saw drops in new home prices last month, with 56 out of the 70 cities witnessing price drops, up from 55 in September. Prices either rose or stayed flat in the remaining 14 cities.

Home transactions have picked up over the past month, the traditional peak season for housing sales in the country, on the back of recent government policies to shore up growth, analysts said.

Despite the central government's continued control, some local authorities have "fine-tuned" their property policies by allowing home buyers to borrow more from public housing funds, causing a rebound in home prices, said Zhang Dawei, an analyst at Beijing-based Zhongyuan Real Estate.

The central bank's loosening grip over lending control also contributed to the pick-up, as first-home buyers can still access to an 85-percent discount on mortgages at banks, Zhang said.

NBS data showed that home sales rose 5.6 percent year-on-year to 4.63 trillion yuan ($736 billion) in the first 10 months, accelerating by 2.9 percentage points from the January-September period.

The People's Bank of China has earlier this year twice cut benchmark interest rates and banks' reserve requirement ratio, or the amount banks are asked to set side as reserves, to bolster the slowing economy.

The economy's growth eased to a seven-quarter low of 7.4 percent in the third quarter, weighed down by a lackluster external market and government efforts to cool inflation and the runaway property sector.

Real estate investment accounts for about 13 percent of China's gross domestic output and one-fifth of the country's fixed-asset investment.

Zhang defined the monthly price rebound as "mild", adding that both home buyers and real estate developers were looking to the country's once-in-a-decade leadership change in early November for new policy signs.

Yin Zhongli, a finance researcher with the Chinese Academy of Social Sciences, said the government's current measures showed that it has kept its vigilance against price hikes.

The PBOC has stopped introducing more easing measures since the interest rate cut in August for fear of reigniting speculation fervor in the property market, he said.

The government has repeatedly reiterated its firm stance on property market control and vowed to keep in place tightening measures like bans on third-home purchases and property tax trials, which have been introduced one after another since 2010.

In the latest move to dispel expectations for policy easing, Minister of Housing and Urban-Rural Development Jiang Weixin said Monday on the sidelines of the 18th party congress that the government will not relax current restrictions on home purchases in the short term, and it may expand the property tax program when the time is right.

The government is unlikely to roll out new tightening measures before the new government comes into office next year, Yin said. But to achieve sustained growth in the long term, the country needs to cap home prices and bear the pains of the slowdown resulted from the effort, he added.