Growth in Chinese home prices accelerates to two-year high

Average new home prices in China's 70 major cities rose 1.4 per cent in August from a month earlier.
Average new home prices in China's 70 major cities rose 1.4 per cent in August from a month earlier.PHOTO: REUTERS

BEIJING (REUTERS) - China's home prices accelerated in August at the fastest pace in nearly two years, a sign that Beijing's efforts to boost a slowing economy may once again be heating up frothy real estate markets.

While solid growth in the sector could cushion the impact of a vigorous multi-year government crackdown on debt and escalating trade tensions with the United States, it could also stoke fears of a bubble if prices continue to climb.

Average new home prices in China's 70 major cities rose 1.4 per cent in August from a month earlier, higher than the previous month's reading of 1.1 per cent, Reuters calculated from an official survey published on Saturday (Sept 15).

That marks the fastest gain since September 2016, and the 40th straight month of price increases, Reuters calculations show, despite tougher curbs designed to rein in a near-three-year real estate boom that has spilled over from megacities to the hinterland.

In a sign of broadening market strength, 67 out of the 70 cities surveyed by the National Bureau of Statistics (NBS) reported a monthly price increase for new homes, up from 65 in July.

Only one city - Xiamen in the south - had an actual price decline.

Compared with a year ago, new home prices climbed 7 per cent, accelerating from July's 5.8 per cent rise, the NBS data showed.