China Property Prices Rise at Slowest Rate in 11 Months

04 August 2011

Apparently property prices in China are slowing as they have increased at their most sluggish rate in 11 months with prices rising just 0.2% from June to July. However property prices still increased in two thirds of the cities whose prices are tracked by SouFun Holdings Ltd, in conjunction with the China Real Estate Index System, and the average home now costs $1,378 per square metre.


The Chinese government has recently expanded its efforts to curb rising house prices, and intends to extend cooling measures to smaller cities. This expansion in measures comes after the number of housing transactions increased by 31% in June in spite of deposits being increased.

The measures are obviously having some effect, and the market is cooling but this is happening very slowly, although some experts are predicting that property prices could fall by around 5 to 10% this year in major cities. Most experts are predicting that the market will continue to soften, which is probably good news as property prices have put home ownership out of the reach of many people and have been a source of some considerable public anger.


Property prices in China have increased by 6.8% year-on-year, and the city of Yichang showed the largest monthly price increase, with prices rising by 1.9% from June. The city of Suqian showed the largest price decline at 2%. However some people are worried that restricting purchases nationwide may have an adverse effect on local economies, as some local governments are reliant on land sales for revenue.

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