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Property prices rise 0.2% in 70 Chinese cities last month

PROPERTY prices edged up 0.2 percent last month in 70 medium and large Chinese cities, the first year-on-year gain in seven months, the National Development and Reform Commission said yesterday.

On a month-over-month basis, prices rose 0.8 percent from May, the fourth consecutive increase since March.

"The housing market started to pick up first in major cities such as Shenzhen, Guangzhou, Shanghai and Beijing and now the momentum has spread," said Xue Jianxiong, an analyst of E-House (China) Holdings Ltd. "The strong buying sentiment, fueled by both individual buyers as well as investors, will probably continue through the second half."

The prices of new homes fell 0.6 percent year-on-year while they edged up 0.8 percent last month from a month earlier.

Signs of recovery

Thirty four of the 70 cities registered year-on-year price increases in new homes while 36 cities suffered setbacks. And on a month-over-month basis, 63 cities posted gains while two witnessed declines, the commission said.

Second-hand home prices, meanwhile, jumped 2.2 percent from a year earlier and advanced 1.1 percent compared with May.

Shanghai's real estate prices fell 0.6 percent last month from a year ago while they gained 1 percent from a month earlier, the commission's online report said.

Both new and second-hand housing markets nationwide registered clear signs of recovery in the past few months as transaction volumes and average prices both soared.

In Shanghai, a total of 8.73 million square meters of new homes were sold across the city in the first half of this year, a year-on-year increase of nearly 70 percent, statistics released by Shanghai Uwin Real Estate Information Services Co showed.

Shanghai property

New homes sold at an average price of 13,932 yuan (US$2,039) per square meter in Shanghai in the first six months, down 2 percent on year. However, it was still 5 percent higher than the average price in the second half of last year, Uwin said.

And in the second-hand market, some 138,400 units of mainly residential, but also office and retail space, were sold across the city during the first half, exceeding the total number sold last year, according to Century 21 China Real Estate.

Average property prices rose nearly 20 percent in Shanghai in the first half, the company said.

Nationwide research completed by Century 21 China Real Estate also found that transaction volumes of new homes more than doubled in Beijing in the first half while prices rose 27 percent on average from the same period a year earlier.

A release of pent-up demand amid price cuts by real estate developers reignited the market after the Spring Festival, according to analysts.


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