Home sales in China rose 24 percent in June on a month on month basis, making it the biggest rise in the past year, according to Bloomberg. However, economic growth and real estate investment in the country slowed down slightly in the first half of the year,which is expected to bog down the sales in the near future.
Home sales went up to reach $120 billion in June, rising continuously for the past six months. Home sales were up 46 percent from a year ago. Prices were also up 7.4 percent from the figures recorded a year ago. According to the Wall Street Journal, prices went up in 100 Chinese cities including, Beijing and Changshu.
The massive jump in home sales comes despite the stringent property curbs imposed by the government. The high prices also had little effect on the buying activity in the country. However, experts believe that the buying rush will slow down in the second quarter as credit is being tightened and the country's economy is slowing down.
In the first half of 2013, growth in revenue from home sales fell to 43.2 percent from a 52.8 percent high recorded from January-May, reports Reuters. Meanwhile, supply has also been contracting as more number of buyers is exhausting the existing inventory.
"Property price gains in the big cities are essentially due to larger demand, with supply falling short. The migration of people into big cities is also a major factor. At the same time, in small and midsize cities, supply would exceed demand in the next two to three years. Hence any changes in property policies won't be applied nationwide, given these different trends," Rosealea Yao, an analyst at GK Dragonomics, said to WSJ.
"The credit tightening will have some impact on developers in the second half because a longer approval period for mortgage or development loans will hit home sales," Johnson Hu, a Hong Kong-based property analyst at CIMB-GK Securities Research, said in a telephone interview with Businessweek.
