Housing prices in 70 major cities in China rose for the third consecutive month in August as low interest rates and positive consumer sentiment fuel demand, the country's top economic planner said yesterday.

Prices jumped 2 percent from a year earlier, accelerating from a 1 percent gain in July and 0.2 percent growth in June. The rises followed six consecutive months of decline, according to a statement from the National Development and Reform Commission.

"Looking to the near future, we estimate property prices could either remain stable or see a rise in September due to the month being traditionally a time for many prospective buyers to purchase a property," Shaun Brodie, associate director for research at property services provider DTZ, told Shanghai Daily.

"For the rest of the year, however, we could see a tailing off in price due to the likelihood of less liquidity being made available to the market," he said.

New bank lending in China plunged to 356 billion yuan (US$52 billion) in July, less than a quarter of June's level. New lending data for August are scheduled to be released today and might show a small month-on-month rebound to as much as 370 billion yuan, industry analysts are forecasting.

The August housing price data showed the cost of new homes rising by a faster range than existing houses. New home prices rose 1.5 percent after 0.3 percent growth in July. Existing homes surged 3.6 percent, against a 3 percent gain a month earlier.

In the first eight months of the year, the volume of homes sold nationwide jumped 45 percent, the National Bureau of Statistics said separately. The value of the sales surged 70 percent, it said.

Investment in property development in China during the eight months rose 15 percent, up from an increase of almost 12 percent in the seven months ended July 31, the bureau said.

(Shanghai Daily September 11, 2009)