BEIJING, Nov 1 (Reuters) - Average home prices in China’s 100 biggest cities edged up for a fifth straight month in October, a private survey showed, adding to evidence of a mild recovery in the property market and frustrating government efforts to temper steep prices.
Average home prices rose 0.2 percent to 8,768 yuan ($1,400) per square metre in October, keeping pace with September’s increase, the China Real Estate Index System said on Thursday.
A steady rise in home prices will renew concerns about property inflation, and could prompt Beijing to further tighten property controls after its once-a-decade leadership change that starts on Nov 8.
Property prices have perked up in recent months as Beijing lowered interest rates twice to shore up economic growth. Some local Chinese governments have also relaxed property market restrictions to boost home sales.
The central city of Wuhan said last week it would allow first-home buyers to borrow more from a government housing fund, a statement on a government website showed.
Over 20 other local governments have let buyers borrow more from the government’s housing fund, which lends at lower rates than commercial banks, data from local property consultant Home Link showed.
“Though property transaction volumes in October were lower than expected, they still kept to a relatively good trend,” said Zhang Xu, a property analyst from Home Link.
The pick-up in property prices mirrors signs of a broader recovery in the world’s second-largest economy. Two surveys of the vast factory sector on Thursday suggested the economy is finally regaining traction.
Compared to a year ago, however, home prices in China’s 100 largest cities are still down 1 percent in October in the seventh month of annual decline, data from CREIS showed.
CREIS, a consultant affiliated to China’s largest online real estate firm Soufun Holdings, only began calculating annual changes in Chinese property prices in June 2011.
In the 10 biggest cities, including Beijing and Shanghai, average home prices rose 0.3 percent from September, but were down 0.6 percent from a year ago, the survey showed.
Firmer house prices are good news for real estate developers bruised by China’s two-year-old campaign to snuff out speculation and cool record house prices by restricting purchases, a policy stance Beijing vows to hold.
Ratings agency Moody’s Investors Service said on Monday the credit quality of Chinese developers is improving on the back of rebounding sales and companies’ ability to tap international capital markets for funds.
China is due to publish its October home price data in 70 major cities on November 18. Prices were broadly flat in September compared to August, calculations based on official data showed, halting two months of upticks.