China saw an increase in property prices for the first time in four months in September, indicating that the market is set to pounce on any let-up by the government in its actions against property speculation.
Officials had already noticed the return of property inflation, strengthening its tightening measures at the end of September to stay one step ahead of speculators.
“It looked like the impact of the April (initial tightening) policy had started to fade, because we did see prices picking up again,” said Jinny Yan of Standard Chartered Bank in Shanghai.
“So it was obviously conviction from the centre that we need to keep prices stable. Without any movement in interest rate policy, this is perhaps the No. 1 focus for Beijing to keep asset price inflation at bay.”
Based on an official poll of 70 cities issued by the National Bureau of Statistics, property prices surged 0.5 percent in September from the previous month and climbed 9.1 percent from last year, a slowdown from the 9.3 percent increase in August.
Beijing implemented new measures on September 29 to further curb property speculation, in reaction to signs of a recovery in housing deals and prices.
Early data has proved its success, putting out the fledgling recovery.
“There has to be a downward correction in property prices,” said Yi Xianrong, an economist at the government think tank Chinese Academy of Social Sciences. ”Otherwise, we may see a big bubble in property market.”