Prices of new houses climbed in 67 cities in China last month, with Shanghai and Beijing witnessing growth for the first time since the central government implemented measures to cut back growth this year.
In China’s capital, new home prices surged 2.2 percent in June from May’s 2.1 percent, while in Shanghai, prices rose 2.2 percent, compared with last month’s 1.4 percent, reported a statistics bureau.
China’s Cabinet announced last week that measures to curb residential prices will apply to smaller cities, after regulating home purchases in metropolitan areas, including Shanghai and Beijing.
The government’s campaign began after developers posted H1 gains in sales and housing transactions rose 31 percent in June, even with increased down payments applied to some mortgages this year.
Mr Liu Li-Gang, a Hong Kong-based Economist at Australia and New Zealand Banking Group, said, “China has negative interest rates right now with high inflation, so it’s not surprising that people are back to higher-yielding assets such as real estate.”
The republic’s inflation marked a three-year high of 6.4 percent last month and has exceeded Beijing’s four percent gain projection every month this year. The People’s Bank of China (PBC) had raised interest rates five times since October 2010, together with the increase of the one-year deposit rate to 3.5 percent.
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