China home prices continue to rise

Prices of both new and existing homes continued to rise in most Chinese cities in June, according to official data released on Thursday.

Of a 70-city statistical pool, 63 Chinese cities saw month-on-month home price rises, whereas the number was down from 65 cities that reported higher prices in May, the National Bureau of Statistics (NBS) said in a statement on its website.

According to the NBS, 55 cities reported month-on-month price gains in existing homes in June compared to the previous month. The figure also dropped from 64 cities that saw price rises in May.

The data was in line with market expectations that the trend of price rises would be sustained even though the amount of increases would be tempered.

Liu Jianwei, a senior statistician with the NBS, said that around half the cities saw narrower new home price increases in June from a month ago. Price gains narrowed by 0.5 and 0.2 percentage points in Guangzhou and Shenzhen, respectively.

The nation's second and third-tier cities, such as Guilin and Baotou, saw new home price increases narrow by 1.3 and 1.2 percentage points, respectively, Liu said.

The tempered tone in analyzing the June data met criticism online, with many complaining home prices had still increased across a broad range and the current prices remained unaffordable for common people.

In first-tier cities, home prices all witnessed sharp rises last month both on a monthly and yearly basis.

The NBS data covered the nation's large and medium-sized cities, including megacities such as Beijing and Shanghai, provincial capitals, and other municipal cities.

Compared to May, only five cities, including Guiyang and Urumqi, saw new home price declines last month. Eight cities, including Harbin and Lanzhou, reported price drops in existing homes. However, the price declines were unanimously limited, the data showed.

On a year-on-year basis, new home prices rose in all cities except Wenzhou last month, while only the cities of Wenzhou and Haikou reported price declines of existing homes.

Property prices started to rebound in the second half of 2012. Runaway prices led the government to issue a guideline in March to tighten control on the real estate sector, including higher transaction taxes, restrictions on purchases of multiple homes, and higher down payments.

However, that guideline failed to stop the upsurge of property prices.

Many Internet users, including a typical netizen with the screen name of "beijier", complained on China's Twitter-like microblogging service Weibo about the ineffective measures by the central and local governments that failed to curb increasing home prices.

They said urban residents, especially the wage-earners, just could not see an end to the home price gains running wild.

Zhang Dawei, director of Centaline Property's research center, said that the prices were driven up by the supply-demand imbalance, and the situation could not be turned around in the short term.

"With ample liquidity in hand, property developers are still confident about the prices," Zhang said.

Analysts estimate the government would adopt more tightening measures to bring the housing prices under control.

The State Administration of Taxation said in a statement on Tuesday that it will study the possibility of expanding property tax pilot programs currently implemented in Shanghai and Chongqing.

However, the tax authority did not include any details regarding a timetable for the expansion.