Residential property prices in urban areas in China rose for the first time in six months in June, according to data released by the National Development and Reform Commission and the National Bureau of Statistics.

The prices in 70 major cities increased by +0.2% year-on-year, following a -0.6% fall in prices in May but echoes unofficial figures which have indicated for a number of months that prices are on the rise amid signs that the real estate market in China is well on the way to recovery.

Analysts also point out that it is a sign that the Government’s stimulus plans are working. In some areas there is even concern that prices could be rising too quickly. Since October the Chinese Government has taken a series of measures, including tax breaks and preferential rates for first time buyers, to shore up the real estate industry which accounts for more than 20% of urban fixed investments.

The property market started to stabilise in March, when prices rose +0.1% month-on-month. Along with favourable government policies, inflation expectations due to a surge in new bank loans this year is also driving the sectors rebound, according to analysts.