The rate of growth of new home prices in China registered a slight increase during August, boosted by an improvement in demand and indicating that economic recovery is underway in the country after bringing the coronavirus outbreak under control. According to data released by the National Bureau of Statistics (NBS), new home prices across 70 leading Chinese cities rose by 0.6% MoM during August, a higher rate than the 0.5% increase seen in July.

On a yearly basis, new home prices were up by 4.8% YoY for the month of August. The housing market is key contributor to China’s economy and the rise in home prices are expected to support efforts towards revival of the economy in the aftermath of the pandemic.

Home sales and investments in the market have been on the rise ever since the lockdown restrictions were removed a few months ago. However, there have been fresh restrictions imposed on property transactions in some major cities to prevent prices from increasing too rapidly.

Back in August, regulators had stated their intentions to introduce new rules to manage the liquidity in the real estate sector and restrict debt levels of property developers in a bid to control risks to the financial system. As a result, some developers have rolled out fresh price cuts to boost sales and increase their cashflow.