China should apply more differentiated property policy as prices surge - Xinhua

SHANGHAI (Reuters) - China should apply more differentiated property policy based on local conditions as home prices surge in some cities, the official Xinhua news agency said in a commentary on Tuesday, as concerns grow that the market may be overheating in some areas. Average new home prices in China's 70 major cities rose 9.2 percent in August from a year earlier, accelerating from a 7.9 percent increase in July, an official survey showed on Monday. The pace of price rises quickened for the first time in four months, possibly as buyers piled into the market ahead of expected measures to clamp down on speculation and curb sharply rising prices. "Local governments should take the responsibility for regulating price differences caused by geographical and individual factors," Xinhua said, adding that some second-tier cities and their neighbouring areas should roll out cooling measures. The main target for property regulations is to "reduce inventory and leverage", Xinhua said. Some third- and fourth- tier cities still have high inventories of unsold homes, capping price rises, while the market in megacities such as Shanghai is red-hot. A recovery since late last year in China's property market has provided a rare bright spot for the slowing economy, boosting demand from construction materials like steel to furniture and home appliances. The eastern city of Hangzhou on Sunday became the latest area to clamp down on the market, saying it would begin to restrict home purchases. Families which are not registered as residents and already own one or more houses in certain districts will not be allowed to purchase another, either new or pre-owned. (Reporting By Winni Zhou and Nathaniel Taplin; Editing by Kim Coghill)