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China home prices rise for eighth straight month

Wang Zhao | AFP | Getty Images

New home prices rose in 69 of 70 major Chinese cities in August from the previous year, official data showed on Wednesday, the same showing as in July, backing the case for more cooling measures from the government.

New home prices in Beijing rose 14.9 percent on year in August, compared with 14.1 percent in July, while prices in Shanghai climbed an annual 15.4 percent for August versus 13.7 percent in July, according to the National Bureau of Statistics.

(Read more: China property immune to tapering: China's richest man)

On average, new home prices across the country rose 8.3 percent on year in August, according to calculations by Reuters based on the data, higher than July's 7.5 percent annual increase and marking an eighth straight month of gains.

Chinese authorities have embarked on several rounds of cooling measures in recent years to bring down stubbornly high real estate prices.

According to Alan Jin, property analyst at Mizuho Securities Asia, a lack of supply continues to drive prices higher.

(Read more: China's property sector is booming even as economy slows

"In terms of home price growth, for the moment they are having a shortage of supply. There are not enough high-end products. Once launched, they are usually snapped up overnight or in the short-term," he told CNBC.

"From 1998 to last year, the total number of private housing units completed was only around 6 million, accounting for 26 percent of urban households, he said. "[This] means ownership of private housing is still pretty low. That's why it's harder to contain housing prices," he added.

Shares of real estate developers were mixed on Wednesday on the news, with Shanghai Shimao higher by 1 percent and China Merchants Property lower by 2.7 percent.

(Read more: Why China's property market is getting scary)

Zhiwei Zhang of Nomura say the latest figures aren't expected to trigger further property cooling measures immediately, but tightening moves could happen later in the year.

"The government seems to have tolerated rising property prices and has not rolled out new tightening measures, which, given the importance of the sector to the economy as a whole, may partly reflect the challenge it faces in achieving a 7.5 percent growth target for 2014," Zhang wrote in a note.

Zhang expects the government to slash 2014 growth target to 7 percent in December, and start tightening monetary and property sector policies after the Communist Party meeting in November.

He expects the Chinese economy to grow 6.9 percent in 2014.

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  • Diana Olick serves as CNBC's real estate correspondent as well as the editor of the Realty Check section on CNBC.com.