BEIJING, Aug 18 (Reuters) - China's home prices rose 0.1 percent in July from June, a second m
onth of modest uptick that raises the risk Beijing may seek to bolster a two-year campaign to curb housing inflation but which also weighs on the wider economy.
Home prices fell 1.5 percent 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. (For a table, click on)
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.
However, the slowing broad economy is a complication.
Real estate directly affects around 40 other business sectors and was a brake on growth in the first half of 2012. The economy grew 7.6 percent year on year in the second quarter, its slowest in three years. A Reuters poll forecasts full-year growth of 8 percent, which would be the lowest since 1999.
A further deterioration in global economic activity is an added risk for policymakers considering more property curbs.
Data last week showed Chinese exports rose just 1 percent in July from a year ago, new loans hit a 10-month low, and factory output grew at its slowest in three years.
The disappointing data and reports on more property tightening steps nudged down property shares and the broad stock market in China in the past two weeks.
Chinese Premier Wen Jiabao said earlier this week: 'The downward pressure on our economy is still big and the difficulties may last for a while.' He spoke after a visit to the coastal export province of Zhejiang.
In year-on-year terms, China's home prices are still falling. The 1.5 percent fall in July was the fifth such decline, according to Reuters' calculation of the official data published on Saturday.
Home prices fell in 58 of the 70 cities in July from a year earlier. They fell 0.7 percent in Beijing and dropped 1.5 percent in Shanghai.
Official data on Aug. 9 showed Chinese property sales increased 26.3 percent in July from a year earlier, quickening from a rise of 6.9 percent in June, reinforcing signs of a recovery in the property sector.
But annual real estate investment growth slowed to a three-month low under the continuing government curbs.
(Reporting by Langi Chiang and Nick Edwards; Editing by Paul Tait) Keywords: CHINA PROPERTY/PRICE
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