The all-important housing and property sector in China may be on the road to recovery after a year in the doldrums. According to a report from cnbc.com, the recent government statistics indicate that monthly home prices have increased for the third straight month this July.
In recent government statistics released, the new home prices throughout the country had grown by 0.3 percent in July, 0.4 percent growth in June and 0.2 percent rise in May. Annually, there was a 3.7 percent decline compared to a 4.9 percent decline in June. This indicates that the market is already gearing its way to recovery.
The Chinese real estate market has been flagging for the past year. While urban areas such as Beijing, Shanghai and Shenzhen have markets on the road to recovery, lower tiered cities see large inventory gathering dust.
The Chinese central bank has even stepped in, cutting interest rates four times over the past year on top of other measures to stimulate spending such as lowering banking reserve requirements, lower down payment requirements and tax breaks for home purchasers.
Despite these measures, it is the high inventory in the secondary cities which is holding back full recovery, according to a report from uk.reuters.com. China Vanke, the country's largest property developer said that the housing market is emerging from the year old slump but would take time for it to realize full recovery.
According to China Vanke President Yu Liang, "The number of land acquisitions has decreased and inventory is slowly being digested. It'll take time, but it's confirmed that a recovery is ongoing."
Recovery though is still centered in the first tier cities. Beijing, Shanghai and Shenzhen continue to pave the way in property market recovery. As E-House China EJ.N Property Analyst Yan Yuejin warned, "We should pay attention to overheating risks in some bigger cities."
