BEIJING: New house prices in China rose in August from a year ago for the first time in 11 months, a survey showed on Tuesday, as government monetary easing policies boosted demand.
The average cost of a new home in the country’s 100 major cities rose 0.15 percent year-on-year to 10,787 yuan ($1,692) per square meter last month, snapping 10 straight months of decline, the China Index Academy (CIA) said in a report.
On a month-on-month basis, new home prices increased 0.95 percent, accelerating from a rise of 0.54 percent in July and the fourth consecutive month of rising prices, according to CIA.
Prices fell for eight months in a row to December last year.
“The property market continued to recover on the back of a series of policy loosenings this year,” CIA said in the statement.
The central People’s Bank of China (PBoC) has cut benchmark interest rates five times since November, the latest last week, in a bid to shore up the world’s number two economy, which is suffering a slowdown in growth.
It also announced it would reduce the amount of money banks are required to keep in reserves—the fourth such move this year—in a bid to encourage lending.
“The ‘double cuts’ will further stimulate consumers’ buying impetus,” CIA said.
“With active coordination by local governments and accelerated new project launches by property developers, we expect both the supply and demand sides of the real estate market to continue to heat up from next month until the end of the year,” it said.
But it added that property firms still had substantial inventories to clear in some cities.
“Home prices will continue to be stable,” it said.
The government on Tuesday also lowered minimum downpayment levels on some second home purchases to 20 percent, after reducing the requirement nationwide in March.
The March move rolled back a four-year-old policy implemented to rein in soaring prices that were making homes too expensive for many buyers and raising worries over social unrest.
In many cities, minimum downpayment levels for second homes used to be as high as 70 percent.
But continued weakening in growth in the world’s second-largest economy has prompted the government to switch tack to support the property sector, a key driver of expansion.
Land sales to developers are also a major source of revenue for cash-strapped local governments.
China’s economy expanded 7.4 percent last year, the slowest pace since 1990, and weakened further to 7.0 percent in each of the first two quarters this year.
The average price in China’s top 10 cities was 19,962 yuan per square metre last month, up 3.83 percent from a year earlier—picking up from a 1.30-percent rise in July.