Home prices in China rose at the slowest rate in 11 months in July, following the government’s additional efforts to reduce the risk of a property bubble, according to SouFun Holdings Ltd.
Residential prices last month rose 0.2 percent from June, marking the slowest increase since August 2010.
Out of 100 cities monitored by SouFun, 66 cities witnessed growth in home prices, with average home values rising to 8,874 yuan (S$1,662) psm.
“China’s property market is cooling down gradually, but it’s still not obvious,” said Peter Bai Hongwei, a real estate analyst of China International Capital Corp.
“This is a matter of time. With high inflation and investment, it’s unlikely home prices will drop soon.”
Residential prices in July grew 6.8 percent from the same period in 2010. Among the 100 cities tracked by SouFun, Yichang City recorded the largest increase at 1.9 percent from June, while Suqian City posted the biggest fall at two percent.
In addition, residential prices in Shanghai increased 0.4 percent last month, while prices in Beijing saw a 0.1 percent increase.
Meanwhile, the Shanghai government said last week that it will intensify inspections on new home prices to make sure they have been priced reasonably.
“The property market in China is headed for a big bust,” said Puru Saxena, Chief Executive Officer of Hong Kong’s Puru Saxena Wealth Management.
“I suspect over the next 18 months to two years, we’ll see a significant decline in Chinese real estate prices.”
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