Realty market regains momentum on back of easing measures

Potential homebuyers take a look at residential housing at a sales center in Yichang, Hubei province, May 23, 2015. [Photo/IC]

China's real estate market continued warming up in August, with new home prices rising both month-on-month and year-on-year for the first time since last April.

The average price per square meter in a sample of 100 cities rose 0.95 percent month on month to 10,800 yuan ($1,696) in August, according to a survey by the China Index Academy, a research unit of SouFun Holdings Ltd.

The data showed housing prices advanced in 51 cities, while the rest of the sample, 49, saw month-on-month contraction.

Among all, Shenzhen led the robust momentum with a 26.38 percent year-on-year surge to 38,093 yuan per square meter, followed by Shanghai, whose housing price rallied 9.9 percent.

Only seven out of the 100 cities saw a month-on-month decline of more than 1 percent in August, as compared to 17 in July, according to the report.

The warm-up came as the government unleashed more easing measures to prop up the economy. The benchmark rate for housing provident fund loans was slashed to 3.25 percent, the lowest in history.

In a joint statement by the Ministry of Housing and Urban-Rural Development, Ministry of Finance and the central bank on Monday, the minimum payment for buyers who use their housing funds to buy a second home has been lowered to 20 percent from 30 percent, if buyers had paid off their previous mortgage.

Although Beijing, Shanghai, Guangzhou and Shenzhen, the four most expensive cities in China, are not required to follow the relaxation, such a move is expected to attract more second-home buyers, said analysts.

"The rate cuts will propel the housing market to further warm up in September, China's traditional peak season," said the China Index Academy in the report, adding that it expects de-stocking to continue as the major trend.