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House prices in the Chinese city of Shenzhen are rising 50% a year - and accelerating

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Chinese new home prices continued to recover in January, rising 2.5% from a year earlier.

The increase, the fourth in a row and above the 1.6% pace registered in December, marked the fastest acceleration seen since July 2014.

Of the 70 cities surveyed, the National Bureau of Statistics (NBS) reported that prices increased 25, especially in the southern metropolis of Shenzhen.

Prices in the city, home to what were once the frothiest of frothy stock markets, soared by 50.9% from 12 months earlier, an acceleration on the 46.8% pace seen in December.

And you thought price growth in New York, London and Sydney was bad!

Of the other major centres, prices in Beijing – the nation’s capital – rose by 10.3% while those in Shanghai – China’s finance capital – jumped by 17.5%. Prices in Guangzhou rose by 9.9% and by 3.9% in Tianjin.

While prices in most smaller cities continued to decline, largely in response to the massive levels of unsold inventory at present, the NBS reported that over the year, price levels were unchanged.

According to Reuters, China’s top leaders have made reducing excess housing stock a key priority in 2016.

Wang Yiming, vice head of the Development Research Centre of the China’s State Council, said last week that it could take more than six years to clear China’s unsold residential housing space, a figure in line with estimate from private sector analysts.

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