Chinese new home prices continued to increase in June, led once again by the nation’s smallest cities.
According to Reuters, citing data from China’s National Bureau of Statistics (NBS), prices across the country rose by 0.7% over the month, the same pace reported in both April and May.
Of the major cities, prices fell by 0.4% and 0.2% in Beijing and Shanghai, while those in Shenzhen, Tianjin and Guangzhou were flat.
The decline in the capital, Beijing, was the first since February 2015.
“China’s 15 hottest property markets, mostly first and second-tier cities, remained stable in June as a city-based property policy continued to take effect,” the NBS said in a statement accompanying the data release.
More than 45 cities have tightened restrictions on property purchases since last October in an attempt to curb rapid price growth.
This has seen price growth in larger cities, where the most stringent restrictions have been put in place, slow markedly in recent months. At the same time price growth in many smaller cities, where restrictions have not been tightened, have accelerated, hinting that prospective buyers are merely moving into markets where they’re still allowed.
While that may be seen as solving a problem — cooling property markets in larger centres while trying to reduce inventory levels in smaller cities — one can argue that it’s potentially creating another by encouraging speculation in markets where fundamentals factors such as supply and demand are weak.
According to Reuters, Luoyang, a third-tier city in central Henan province, led the charge higher in June with prices for new units rising 2.3%, leaving annual price growth at 10.2%.
Nationwide, prices increased by 10.2% from a year earlier, down from 10.4% in May.
Of the larger cities, prices rose by 10.7% in Beijing and 8.6% in Shanghai, outpaced by growth of 17.8%, 12.3% and 12% in Guangzhou, Tianjin and Chongqing.
In Shenzhen, once the hottest of all hot housing markets, prices grew by just 2.7% over the year, well below the 46.7% increase seen in the 12 months to June 2016.
According to calculations from Reuters using data released by the People’s Bank of China, new household loans — mostly for mortgages — rose to 738.4 billion yuan in June, up from from 610.6 billion yuan in May.
You can read more here.
NOW WATCH: Money & Markets videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.