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China Housing Prices Showing Signs of Slowing

BritCham / CBBC
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There are signs that the Chinese Government’s measures to reign in spiraling housing prices across the country may be starting to have an effect with prices in July showing the lowest on- month increase this year.

According to a survey of property and real estate developers undertaken by the China Real Estate Index System, housing prices in 100 major cities rose 0.21% in July, which is slower than the 0.41% recorded increase for June. However, prices are still rising with the average home in July costing 8,874 RMB per square meter, an increase from the 8,856RMB recorded in the previous month. Similarly, property prices rose in 66 of the 100 cities, although 33 cities stated a decline in housing prices and one showed no change.

Some analysts are predicting a continued softening in the housing market and a fall of between 5- 10% in prices across major cities this year. The central government has declared it will continue to tackle rising prices by extending restrictions on purchases to some second and third-tier cities, as well as keeping interest rates high as it struggles to keep housing prices within the reach of its citizens. It has also announced the construction of ten million new units of affordable housing, another effort to deflate the real estate bubble.

 

Source: Wall Street Journal

 

 

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