China home prices rise for third month in February

Home prices in China rose year-on-year in February for the third consecutive month, an independent survey showed Friday, citing strong credit growth as a key factor. New home costs in 100 major cities jumped 2.48 percent from a year earlier to an average 9,893 yuan ($1,589) per square metre last month, the China Index Academy said, following rises of 1.2 percent in January and 0.03 percent in December. Prices rose 0.83 percent month-on-month, the ninth consecutive monthly increase, the organisation said in a statement. "The housing ministry's support of demand for housing upgrades since late last year and the evident growth in new bank loans resulted in optimistic sentiment," it said. But it noted a "tightening trend" on property policy, as some cities tightened rules on housing funds that help people buy homes and banks cut back quotas for mortgages. Property costs are a key social issue in China, where millions of would-be buyers have been priced out of the market, fuelling resentment. The central government reiterated its tough stance over the regulation of the sector last month, pledging to strictly implement earlier control measures and expand property taxes. Possible further tightening and fewer launches of new home sales in February due to the Lunar New Year holiday kept prices in some cities from rising too fast, the academy said. The average home price in Beijing stood at 25,290 yuan per square metre in February, up 0.86 percent month-on-month, slowing from a 2.27 percent monthly rise in January. In Shanghai, prices averaged 28,022 yuan per square metre, up 1.33 percent month-on-month, compared with a 2.3 percent gain in January. China has sought to control residential property prices for the past three years, with measures including restrictions on second and third home purchases, higher minimum downpayments, and taxes in some cities on multiple and non-locally-owned homes. New properties are the most important part of China's real estate market and the survey covers prices of both houses and apartments, including flats with prices regulated by the authorities. The academy is owned by SouFun Holdings, China's biggest real estate website operator. Data is collected every month by on-the-spot surveys and through reports by estate agents, property developers and officials. From Times of Oman