In a sign that the momentum in China’s property market is continuing to build, sales prices and volumes surged last quarter, according to the findings of a private survey.
E-house China R&D Institute, a Shanghai-based property research company, reported that the average sale price in 30 cities surveyed jumped 11% to 12,187 yuan per square metre in the June quarter, according to a report in the China Daily newspaper.
The increase left prices 16.5% higher than levels of a year earlier.
Fitting with the recent trend in the government’s official house price index, E-house reported that sales volumes and prices in large tier-one cities – Beijing, Shanghai, Guangzhou, Shenzhen – jumped to a five-year high during the quarter.
“Huge sale volume surge in second quarter pushed up sale price considerably, higher land cost also contributed to higher sales price”, said Xie Jinlong, property analyst at E-house, adding “with further policy easing and bullish speculation among property investors, property market will sees more recovery in third quarter”.
The renewed gains in Chinese property prices, particularly in tier-one cities, comes at an interesting time given recent developments in the nation’s stock market.
In the 12 months to mid-June, the benchmark Shanghai Composite index rose a jaw-dropping 150% before slumping nearly 35% in the space of just six weeks.
While not applicable to everyone, it’s likely that some investors, having taken profit after such a monumental rally, may now be favouring property investment, especially given the wild movements in seen in China’s stock market of late.
In the year to June, the government’s official house price index, dragged down by weakness in smaller tier-two and three cities, fell 4.9%, the slowest pace of decline seen since December 2014.
Interestingly, those cities home to the nation’s major stock markets – Shanghai and Shenzhen – recorded the strongest levels of growth.
Has that trend continued into July? That question will be answered when the NBS releases its house price index on August 18.
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