China home prices rise on month in July, down on year

Home prices fell 1.5% year-on-year, according to Reuters calculations based on data from the National Bureau of Statistics, but the trend of month-on-month falls seen in October through to May has been reversed in June and July.

Home prices rose in 49 of 70 major cities monitored by the National Bureau of Statistics in July in month-on-month terms, up from 25 in June, adding to recent signs of an end to the government-induced property market downturn.

"A new trend does appear to be materializing as home prices continue on an upward trajectory after the Chinese government began to loosen certain levers to address concerns around a slowing economy," Mark Budden, China area leader at consultancy EC Harris, said in a note after the data.

"It's still a little premature to label the slowdown over as certain macro-economic factors could yet threaten this recovery and, if the market does begin to heat up again, the central government is likely to step in to curb speculation," he added.

The shift follows a slew of pro-growth measures from Beijing since autumn 2011, as well as unauthorised policy relaxation by more than 30 local governments that has revived housing demand.

The State Council, or China's cabinet, sent eight inspection teams in late July to find out why home prices were rising.

China's official news agency, Xinhua, reported late on Friday the inspectors found some problems needing "particular attention", including local easing measures and some weak supervision.

There is speculation in Chinese media that China is set to hike transaction taxes, or expand a property tax beyond the current test beds of Shanghai and Chongqing.