Housing prices in China climbed 0.8 percent in November, increasing for a second month even as the central bank increased the interest rate for the first time since 2007, said SouFun Holdings Ltd, the country’s largest property website owner.
Based on 100 locations monitored by SouFun, residential prices in 86 Chinese cities surged from October, with average home values nationwide hitting 8,487 yuan psm. The increase followed a 0.7 percent gain in October’s home prices from September, said SouFun.
This year, China vowed to speed up trials of real estate taxes to cool prices and restrain foreign capital, as well as suspend mortgages for third-home purchases.
In October, the central bank raised interest rates and raised the reserve-ratio requirements for banks twice. “It showed that home prices are stabilising amid the government’s tightening,” said Huang Yu, a Beijing-based researcher at SouFun. “The home price gains were mild compared with the high inflation rate as other products are rising rapidly.”
China’s inflation accelerated to the fastest pace in two years last month, as consumer prices rose 4.4 percent from 2009, higher than the 4 percent median forecast in a survey of 28 economists conducted by Bloomberg News.
Zibo, a mid-sized city located in eastern China, saw a 2.5 percent increase from October, while prices in Shanghai and Beijing were up 0.4 percent and 0.1 percent, respectively, said SouFun.
China’s property policies in 2011 will underline increasing supply and price stability, said Wang Tao, a Beijing-based economist for UBS AG.
“Stabilising real estate prices in large cities is vital for the government, which will maintain a tightening bias on real estate demand, possibly including a pilot programme on real estate tax and higher mortgage rates,” said Mr. Wang.