Property prices in China rose slowest in eight months Pace in August

China’s property prices rose at the slowest pace in eight months from a year earlier in August as officials cracked down on speculation and multiple purchases.
Values in 70 major cities climbed 9.3 percent, the statistics bureau’s newspaper, China Information News, reported today. That was less than the 10.3 percent increase in July and the median 10 percent estimate in a Bloomberg News survey of eight economists. Prices were unchanged from July.
The report reduces the case for Premier Wen Jiabao’s government to implement further tightening measures to damp asset bubbles in the world’s fastest-growing major economy. Property stocks dropped the most since June 30 in the past two days on speculation policy makers would take additional steps.
Moderating prices “make it less likely the government will tighten property measures for now,” Alan Jin, a property analyst at Samsung Securities Ltd. in Hong Kong, said ahead of the data. “But six months down the road, a slowdown in price growth won’t be enough, what the government really wants to do is bring prices down.”
The data come after reports that showed property transactions rising in August from July. Data compiled by Soufun.com, the nation’s largest property website, showed housing transactions in Shenzhen surged 84 percent last month from July, while sales rose 31 percent in Shanghai and 23 percent in Beijing.
Sales Gain
China Vanke Co., the nation’s largest listed developer, reported a 149 percent jump in August sales from a year earlier, and Poly Real Estate Group Co., the second largest, said sales almost doubled.
“This is a tug of war between the government and property developers and rebounding transactions may back some developers’ resolve not to cut prices,” Shen Jianguang, a Hong Kong-based economist at Mizuho Securities Asia Ltd., said before today’s release. “It’s the government’s credibility on the line if property prices fail to drop.”
A wave of new apartments is due to come onto the market in September and October which will trigger a decline in prices as developers compete to move their inventory, Stephen Green, head of China research at Standard Chartered Plc said yesterday.
--Li Yanping. With assistance from Jay Wang in Singapore. Editors: Nerys Avery, Paul Panckhurst
To contact Bloomberg News staff for this story: Li Yanping in Beijing at +86-10-6649-7568 or yli16@bloomberg.net
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