China’s new home price rise reflects the country’s economic recovery following challenges earlier in the year due to the novel coronavirus pandemic, said European residential property developer White Peak.
White Peak group CEO and founding partner Jesper Jos Olsson told CGTN in an interview that the latest August home price increase was “very, very healthy.”
“No real surprises, I think a four to five percent increase is very, very healthy, and I think it goes to show that the recovery of the economy is strong since the beginning of the year,” said Olsson.
China’s latest official data shows that new home prices in China rose at a slightly faster monthly pace in August as consumer demand in the housing market shows signs of recovery from the COVID-19 pandemic. On an annual basis, home prices rose 4.8 percent in August, matching July’s pace.
New home prices in China’s top four first-tier cities – Beijing, Shanghai, Guangzhou and Shenzhen – rose by 0.6 percent month-on-month in August, up 0.1 percent from a month earlier, according to data from the National Bureau of Statistics (NBS).
Olsson said his firm expects China to continue on its current growth path for several decades. “Well, I think they (prices) will continue on this path ... China is now only 60 percent urban, so we have many decades of this growth,” said Olsson.
Meanwhile, new home prices in over 30 second-tier cities also saw the same monthly growth rate, while third-tier cities rose at a faster pace of 1 percent. Olsson said, moving forward, the focus of growth would continue to be in the medium and smaller cities.
“So, if you look at the whole market, basically, the tier-two and three and smaller cities are the largest part of the market, and we have been focusing on those for thirteen years. So, we are very excited at the continuing," he said.
"This is, obviously, also the stage where most of the urbanization is continuing. So, we are very excited to be in that market."
Olsson also said real estate will remain a major pillar of the Chinese economy, as it has a “very deep supply chain" that creates a lot of jobs and helps urbanization.”
“Urbanization also generates productivity because moving people into cities is, of course, great for productivity. So, it is, of course, an important sector,” he said.
The property market has been a major driver of China’s economic recovery, with home sales and investment growing at a robust pace in recent months after the novel coronavirus lockdowns were lifted. Yet policymakers remain wary of the risks of overheating as they try to support a crucial sector of the economy without stoking excessive speculation.
Since July, many major cities have imposed new restrictions on property transactions to arrest sharp price rises.
(With input from Reuters)