Fewer Chinese cities see house price rises

Fewer Chinese cities saw rises in house prices in August from July as the country continued efforts to curb property prices and speculation. In August, out of a statistical pool of 70 major cities, 36 cities recorded higher new home prices than a month earlier, according to figures released by the National Bureau of Statistics (NBS), released on Tuesday. The figure was down from 50 in July. Compared with July, new home prices in 20 cities declined in August, up from nine in July, while 14 cities saw their new home prices unchanged, the data showed. However, on a year-on-year basis, more cities saw rebounds in new home prices last month, with 14 out of the 70 cities witnessing price increases of up to 1.3 percent. Prices rose in 11 cities in July from a year earlier. China has tightened its curbs on the property sector since 2010 in an effort to bring rocketing house prices back to a reasonable level. The government has restricted purchases in several cities while requiring higher down payments and introducing property taxes. Recent government policies to bolster a slowing economy, including interest rate cuts in June and July, helped boost demand for housing and fuel expectations of price rises. Chinese government officials have said property price curbs will remain in place, indicating price rises will be mild, analysts said. Neither strong rebound nor heavy decline will be likely in the fourth quarter of the year, and the central government will not unveil new curbing measures as long as house prices remain stable, said Yang Hongxu, a senior analyst with the Shanghai-based E-house China Research and Development Institute. Yet concerns are rising that the U.S. launch of a third round of quantitative easing, or QE3, may mean higher prices. The impact of QE3 on China's property market will be complicated and limited, depending on the Chinese central bank's next move, said Yi Xianrong, a finance researcher with the Chinese Academy of Social Sciences, a government think tank. QE3 will increase liquidity in the financial market, which may push up inflation and house prices, Yang said. However, he added that the inflation pick-up may then force policy makers to tap credit brakes and thus check further rises in house prices. The US Federal Reserve last week announced a new round of bond-buying and extended the duration of its ultra-low short-term interest rate until mid-2015. QE3 is the third round of quantative easing that the Fed has introduced since the onset of the global financial crisis in 2008.