September 2, 2013 / 6:31 AM / 4 years ago

China August home price inflation quickens for 2nd month-surveys

BEIJING, Sept 2 (Reuters) - China’s property inflation quickened in August for a second straight month, two private surveys showed, underlining strong momentum due to a recovery in land prices and complicating the government’s efforts to prevent a property bubble.

Home prices in 288 major cities rose 1.1 percent in August from July, accelerating from July’s monthly increase of 0.8 percent, a poll by a real estate services company E-House China showed.

From a year earlier, home prices jumped 11 percent in August, unchanged from July’s annual gains, E-House said.

A separate survey by China Real Estate Index System (CREIS) showed average prices in the 100 biggest cities rose 0.92 percent on a monthly basis, slightly faster than the previous month.

China still faces record home prices that are well beyond the reach of most ordinary citizens, despite having enforced strict controls on the property market for nearly four years. A strong property market, however, has been a crucial driver of activity in the world’s second-largest economy as other areas such as exports slow.

That presents a dilemma for the authorities, as they look to balance controlling a possible housing bubble and heading off social unrest as prices surge, while not depriving the economy of a growth driver.

“Continuously rising land prices have helped push up home prices,” said a statement from CREIS, a consultancy linked to China’s largest online property information firm Soufun Holdings .

It added that some local governments have started easing home purchase restrictions, which persuaded more buyers to enter the market.

Last month, the eastern city of Wenzhou relaxed curbs on property purchases to let some people buy second homes.

In China’s 10 most expensive cities, including Beijing and Shanghai, average home prices rose 1.5 percent on the month and 12 percent on the year, CREIS added.

China is due to publish official home price data for 70 major cities for August on Sept. 18. The pace of China’s month-on-month home price rises edged down for a fourth month in July though the year-on-year gains were the strongest this year.

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