Despite recent attempts by the Chinese central government to cool down the Chinese housing market, it seems as if local Chinese governments are not obediently following in line. This conflict of power has in turn complicated the government's attempts to stimulate economic growth in an economy that is experiencing slowing growth.
The State Council recently warned local government officials against violating housing policies through such methods as relaxing house purchase limits and offering subsidies. Moreover, new data shows that China's new-home prices rose in the largest number of cities in 14 months in July; 49 of the 70 cities tracked by the government reported rising new-home prices. This significant increase is mirrored by increased lending from China's big 4 banks, which lent approximately 70B RMB in the first half of August, compared to 50B RMB in the first half of July.