China’s property sales surged 60% by value in the first seven months. This added to the concern that record lending will create a real-estate bubble in the world’s fastest-growing major economy. Or is this another indication that China is successfully plowing its way through the financial downturn which has hammered most of the rest of the world.
The statistics bureau said, in a statement on its website, property sales accelerated after a 53% gain in the first half from a year earlier. Real estate investment rose 11.6%, up from 9.9% in the six months to June 30.
Home prices in 70 major cities went up 1% in July from a year earlier, the biggest increase in nine months. But note carefully that Premier Wen Jiabao reiterated that monetary policy will remain unchanged, after climbing asset prices triggered speculation that a tightening could be imminent.
David Cohen, an economist with Action Economics in Singapore, said, "Policy makers may be getting a bit edgy about asset bubbles developing. They may use administrative measures to cool prices." It does not look as though it is happening in the near future.
Blooomberg quoted the NRDC figures which showed that in July, new home prices rose in 43 cities and fell in 26 from a year earlier. The largest increase was a 6.4% gain in the eastern city of Ningbo.