Home prices in both new and existing markets rebounded in August with first and selected second-tier cities leading gainers again.

The number of Chinese cities recording new home price growth from a month earlier rose by 13 to 64 cities, according to the National Bureau of Statistics, which tracks prices in 70 cities across the country. Prices declined in four cities and remained unchanged in the rest two.

Zhengzhou in central Henan Province outpaced all with a month-on-month increase of 5.6 percent for new home prices, accelerating from a 2 percent rise in July. It was closely followed by Shanghai and Hefei in eastern Anhui Province, where new home prices rose 5.2 percent and 4.8 percent, respectively.

In July, new home price growth in these two cities stood at 1.4 percent and 4.2 percent.

Shanghai’s growth was also the fastest among the country’s four first-tier cities. Beijing was second with a month-on-month gain of 3.8 percent and was followed by Guangzhou and Shenzhen where new home prices climbed 2.4 percent and 2.1 percent, respectively, the bureau said.

“August’s data represented a sharp turnaround for the momentum of the property market after the last three months of slowing growth rates,” said James MacDonald, head of China research at Savills, a global real estate services provider. “While the fastest acceleration in price growth was still in the leading first and second-tier cities, lower-tier cities also shared in the reversal of fortunes.”

With prices rising at the fastest rate in over five years, the policy environment is likely to shift again, cooling the property market in the leading cities more than it has in the past few months, he added.

In fact, to combat the ever-increasing home prices, city governments across the country, including Hefei, Suzhou, Nanjing, Xiamen and Wuhan, have introduced tightening measures this year by either limiting the number of homes people are eligible to buy or making the down payment higher.

In the latest move, Hangzhou in Zhejiang Province announced over the weekend that non-local buyers would not be allowed to purchase a house, covering both new and existing property, if they already own one or more homes in the city.

Year on year, new home prices rose in 62 cities in August, an increase of four from July, the bureau’s data showed.

A third-quarter survey released on Sunday by the People’s Bank of China revealed that 53.7 percent of urban residents found home prices “high and unacceptable,” up 0.3 percentage points from the previous quarter.

(Source: shanghaidaily.com  Author: Cherry Cao)