August 17, 2010 / 3:45 AM / in 7 years

China calls for action after housing prices perk up

3 Min Read

BEIJING, Aug 17 (Reuters) - Officials throughout China must work to stabilise the real estate market after property prices shrugged off a tightening campaign and rose in July, the powerful central planning agency said.

Property prices rose 1.6 percent in July from a month earlier to an average of 8,680 yuan ($1,276) per square meter, the National Development and Reform Commission (NDRC) said in announcing the results of its survey of 36 large- and medium-sized cities.

Increases were particularly large in a number of second-tier cities, while prices were steady in major cities, it added.

"Many cities are stable. In some cities, price increases are quite large. Every locality should continue the work of stabilising property prices," the NDRC said on its website.

The Chinese government has been trying to cool its real estate market after prices soared earlier this year. While price rises have slowed and transaction volumes have fallen sharply, many Chinese still view property as a good investment.

Developers have called for a loosening of controls, but the latest data appeared to underscore officials' concern that prices could take off again if the tightening policies, such as higher downpayment requirements, slacken.

The results of the NDRC survey contrasted with an index of 70 cities published last week by the National Bureau of Statistics, which showed that property prices were unchanged in July from June. [ID:nBJB003897]

The 36-city index is based on information gathered by the NDRC's price monitoring bureau, while the statistic agency's 70-city index is compiled primarily from developers' replies to a survey.

In its breakdown of the data, the NDRC said that prices for ordinary homes rose 1.2 percent in July from a month earlier, while prices for high-grade homes fell 1.4 percent.

Commercial property price rose most sharply, up 6.7 percent from a month earlier.

Vice Premier Li Keqiang, who is positioned to replace Wen Jiabao as premier in 2013, said on Friday that the government would not relax its policies aimed at curbing speculation in the property market. [ID:nBJA002290] (Reporting by Simon Rabinovitch; Editing by Ken Wills) ($1=6.803 Yuan)

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