(SHANGHAI) New home prices in 36 medium- and large-sized Chinese cities rose 6.3 per cent last month from a year earlier as bank lending tripled in the first half.
The average price of new homes rose to 6,554 yuan (S$1,394) per square metre, the National Development and Reform Commission said on its website yesterday. New home prices last month rose 1.1 per cent from May, China's top economic planning agency said.
The increase in new bank loans to 7.37 trillion yuan in the first half helped to spur demand for property and boosted prices, said Bohai Securities Co analyst Zhou Hu. Housing prices in 70 major Chinese cities rose in June for the first time in seven months, the government said on July 10.
'China's property market is recovering and prices should continue to rise in the third quarter,' said Mr Zhou, who recommends buying shares of China Vanke Co and Poly Real Estate Group Co, the country's biggest developers by market value.
Nationwide property sales last month rose 32 per cent by floor space and 53 per cent by value from a year earlier, the National Bureau of Statistics said on July 10. Investments in property development in the first half increased 9.9 per cent, the agency said.
Vanke, China's biggest developer by market value, said on July 4 that its first-half property sales rose 28 per cent from a year earlier to 30.8 billion yuan. Poly Real Estate said its first-half sales rose 168 per cent to 21.1 billion yuan.
The China Banking Regulatory Commission on Sunday ordered lenders to raise reserves against non-performing loans. The regulator's Shanghai branch also told the city's lenders to obey mortgage rules that require down payments of no less than 40 per cent of the price. -- Bloomberg
Source: Business Times, 21 July 2009