Home prices continued to rise in most major cities of China despite stringent property curbs imposed by the government in the recent past. Prices rose in 69 of 70 major cities marking the strongest annual gains, according to several media reports.
Data released by the National Bureau of Statistics (NBS) reveals that on an average, prices were up 0.7 percent in 70 major Chinese cities in July on a month on month basis. According to Reuters' calculations, average prices of new homes rose 7.5 percent, the highest since January 2011.
Prices in Shenzhen and Guangzhou climbed 17 percent, leading the pack of cities that posted the highest growth. Both Shanghai and Beijing saw prices climb 14 percent in July. The eastern city of Wenzhou was the only province that posted a price decline of 2.4 percent, on a year on year basis.
"The July home prices in 70 major cities are still rising due to strong demand from first-time home buyers and recent rising land prices," Liu Jianwei, a senior statistician at NBS, said in a statement.
Some market players suggest that the shortage of supply has also driven up prices in the country. The supply shortage was largely due to the restricting regulations, reports BBC.
The country has been tackling high property prices since 2010. The administration imposed many stringent rules like higher capital gain taxes, limitations on multiple home purchases and higher down payments in some cities. However, the curbs were slowing down economic growth.
The real estate sector has been the only solace for the dwindling conditions in the country. Now, the government is facing a massive challenge of controlling an asset bubble without holding down the economic growth.
Experts say that the new government is a little more tolerant about the rises.
"The government is expected to release a "long-term mechanism" for stable and healthy development in about three months," Zhu Zhongyi, deputy head of the China Real Estate Industry Association, said to Xinhua News Agency.
They hope that the curbs will eventually loosen up and aim at long term policies. They also believe that home prices will decelerate in the second half of 2013. No mentions of more curbs were made in the Chinese Communist Party's July statement, thus encouraging property analysts, according to Reuters.
