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China home prices up 7.4% in year to June

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(Globalpost/GlobalPost)

Home prices in major Chinese cities jumped 7.4 percent year-on-year in June, an independent survey showed Monday, despite government moves to curb the property market.

The average cost of new homes in 100 major cities reached 10,258 yuan ($1,672) per square metre last month, the China Index Academy said in a statement.

June marked the seventh consecutive month of rises, it said, although the monthly increase of 0.77 percent narrowed slightly from May's 0.81 percent as banks tightened credit to the property sector due to a liquidity squeeze, the academy said.

For more than three weeks funds have been in short supply on China's interbank market, and the interest rates banks charge to lend to each other have surged to record highs.

The academy, which is owned by Soufun Holdings, China's largest real estate website operator, said banks had tightened mortgage lending as a result of the credit crunch.

But it added: "Looking into the second half, the upward pressure on home prices remains high, driven by multiple factors including demand and the 'heat' in the land market."

Property prices are a sensitive issue in China and authorities have sought for more than three years to control their rise.

Measures to contain prices include restrictions on purchases of second and third homes, higher minimum down payments and taxes in some cities on multiple and non-locally owned homes.

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http://www.globalpost.com/dispatch/news/afp/130701/china-home-prices-74-year-june