The average price of new homes rose to 6,554 yuan ($959) per square meter, the National Development and Reform Commission said on its Web site today. New home prices in June rose 1.1 percent from May, China’s top economic planning agency said.

The increase in new bank loans to 7.37 trillion yuan in the first half helped spur demand for property and boosted prices, said Bohai Securities Co. analyst Zhou Hu. Housing prices in 70 major Chinese cities rose in June for the first time in seven months, the government said July 10.

“China’s property market is recovering and prices should continue to rise in the third quarter,” said Zhou, who recommends buying shares of China Vanke Co. and Poly Real Estate Group Co., the country’s biggest developers by market value.

Nationwide property sales in June rose 32 percent by floor space and 53 percent by value from a year earlier, the National Bureau of Statistics said July 10. Investments in property development in the first half increased 9.9 percent, the agency said.

Vanke, China’s biggest developer by market value, said July 4 that its first-half property sales rose 28 percent from a year earlier to 30.8 billion yuan. Poly Real Estate said its first- half sales rose 168 percent to 21.1 billion yuan.

The China Banking Regulatory Commission yesterday ordered lenders to raise reserves against non-performing loans. The regulator’s Shanghai branch also told the city’s lenders to obey mortgage rules that require down payments of no less than 40 percent of the price.

Source: Bloomberg