China’s urban home prices rose for the first time in seven months, adding to evidence that record bank lending is driving a recovery in the economy.
The National Development and Reform Commission said prices in 70 major Chinese cities gained 0.2% in June from a year earlier.
Home values increased 0.8% from May, the fourth straight monthly gain. The China Se Shang Property Index of 24 real-estate companies rose 1.6%.
Lu Ting, an economist at Bank of America-Merrill Lynch, said in Hong Kong, "China’s property market is reviving and real estate investment may rebound by 20% in the second half of this year, backing economic recovery."
With exports dropping, China is driving growth by lifting domestic consumption of cars, appliances and housing with an RMB4 trillion ($586 billion) stimulus and higher bank lending. According to the National Bureau of Statistics, real-estate investment grew 9.9% in the first half as compared to a year ago.
The report said property sales rose 32% by floor space and 53 % by value. New loans rose almost fivefold in June from a year earlier to RMB1.53 trillion according to the central bank.
Blooomberg reported NDRC figures showed Hangzhou’s home prices rose 0.7%in June from May, and were 0.2% lower from a year earlier.