China home prices snap 8-mth losing streak

Average home prices in China’s 100 major cities edged up 0.03 per cent last month from December a year earlier, snapping eight months of decline and reinforcing signs of a property market recovery in Asia’s largest economy, a widely-followed survey showed on Friday.

The data from the China Real Estate Index System (CREIS) added to evidence that the real estate market has found support from broad monetary policy easing aimed at reviving economic growth, despite central government pledges to maintain curbs specific to the property sector.

The increase in property prices coincides with signs of a broadening economic recovery, as two purchasing managers’ surveys this week showed the pace of growth in the manufacturing sector quickening.

“There is a low possibility of a sharp rise in home prices nationally in 2013, since the de-stocking process has not finished,” said CREIS, a consultancy affiliated to Soufun Holdings, China’s largest online real estate company.

Although the survey marked the first increase in year-on-year prices in nine months, it also showed the seventh straight monthly increase. Average home prices in the 100 largest cities rose 0.2 per cent in December from November.

In the 10 biggest cities, including Beijing and Shanghai, average home prices rose 0.5 per cent from November and were up 1.1 per cent from a year ago.

China’s fight against property speculation has headed into its third year, but middle-class Chinese still feel priced out of the urban housing market. A recent uptick in land costs – typically a prelude to home price rises – has changed market sentiment and pushed prospective home buyers back to the market in a bid to buy before prices rise even further.

Source : Today – 4 Jan 2013

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