The reality of realty sector

The recent upturn in the real estate market has complicated policymaking.

Housing prices and transactions have picked up gradually after several months of stagnation. An official survey across 70 Chinese cities shows housing prices in 25 cities rose month-on-month in June. That contrasts with the situation in May when only six cities saw month-on-month increase and is a reversal of falling prices since October.

Apart from market demand fueled by monetary policy easing in recent months, local governments' de facto loosening of regulatory rules is responsible for the rise in transactions. In fact, a number of local governments have announced policies to facilitate house buying in recent months.