China housing inflation yields slightly in August

The new property prices rose by 4.1 percent in August over the same month last year, below the 4.3-year increase seen in July, according to Reuters estimates, which means that measures China to cool the property market are paying off.

The National Statistics Bureau stopped publishing this year the average change in housing prices across China, but its latest data on 70 major cities showed that prices of new properties in cities like Beijing, Shanghai and Guangzhou not rise in August.

Since late 2009, the country applies a series of measures including new taxes on the property in two cities and restrictions on the number of households that each family can buy, to reduce speculation and rampant property inflation control that encourages social unrest .

China has closed almost all the channels through which real estate developers to raise funds, including bank loans, trusts and companies to open stock markets, in addition to the five increases in interest rates since last October.

Chinese banks are also lowering their exposure to real estate sector to the record level in the price of housing, providing fewer mortgages, asking for a higher payment to policyholders of credit or higher interest rates applying to those required by regulations. That makes it harder for property acquisition.

As a result, housing prices fell in more cities during August compared with July, but not yet recorded an annual decline.

Intermonthly speaking, prices of new homes fell in 16 cities in August, including a maximum decline 0.4 percent in Chongqing. In July had fallen in 14 cities in the largest decrease was 0.3 percent, according to agency statistics.

Prices of existing homes fell in 26 cities in August from July, and the largest decline was in Nanchang, compared with the fall in July in 12 cities and 19 cities in June.