Monday, 18 July 2011

Home prices accelerate in Beijing and Shanghai

After data last week showed that China's economy slowed only slightly in the second quarter, another report today suggests that policy makers may need to tighten further.

From Bloomberg:

New home prices rose in 67 Chinese cities in June, with growth in Beijing and Shanghai accelerating for the first time since the government stepped up efforts this year to curb growth.

In Beijing new home prices rose 2.2 percent last month from a year earlier, compared with 2.1 percent in May, while in Shanghai they climbed 2.2 percent, compared with 1.4 percent growth the previous month, the statistics bureau said on its website today.

China’s cabinet said last week it will expand measures to rein in residential prices to smaller cities after limiting home purchases in metropolitan areas including Beijing and Shanghai. The government is intensifying real-estate restrictions nationwide after developers posted gains in first-half sales and housing transactions climbed 31 percent last month, even as China increased down payments on some mortgages this year.

“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,” said Liu Li-Gang, a Hong Kong-based economist at Australia & New Zealand Banking Group Ltd. The government’s housing restrictions “simply have limited effect in controlling home prices.”

No comments:

Post a Comment