China's boomtown of Shenzhen unexpectedly lost its top-performer spot in August's home price race, but alongside other big cities still drove rapid property price growth.
Shenzhen saw home prices rise 36.8% from a year ago, down from 40.9% in July.
Its growth compared with the average new home price in 70 major cities climbing an annual 9.2%, up from 7.9% in July, National Statistics Bureau data showed today.
The same data showed 64 of 70 major cities tracked by the NBS notched year-on-year price gains, up from 51 in July.
"Sharp price gains were propped up by just a few overheated cities, mainly the four first-tier cities, namely Beijing, Shanghai, Guangzhou, and Shenzhen," economists said. They also noted that severe supply and demand imbalances were behind the price rise.
Shenzhen, China's tech hub bordering Hong Kong, has been the top performer since April 2015, and analysts say its slowing but still spectacular property price growth over August might be due to its high base - with values nowhere near their peak.
47 cities imposed restrictions on home prices a few years ago when similar price surges were seen, while only six cities have imposed restrictions so far in this round of price hikes.
Although Shenzhen, along with financial hub Shanghai, tightened deposit requirements earlier this year, average new home prices there jumped to more than $10,000 per square metre last week and are nearly 80% higher than last September.
Shenzhen is the tech hub of China where many listed companies are headquartered, and so many people have secured funds from the stock markets and have the capital to invest in property, analysts said.
They added that land supply is scarce, and Shenzhen's population is mainly young people, who have an urgent need to buy houses.
Shanghai and Beijing prices also rose significantly at 31.2% and 23.5% on-year, picking up from 27.3% and 20.7% in July.
Chinese policymakers have expressed concerns over mounting debts from an over-inflated property market of late, with the central bank's chief economist urging more steps curb the flow of capital into the property market.
Official data showed that mortgage loans remained the major driver of China's overall loan growth, accounting for more than 70% of bank loans in August.
The rapid rise in property loans over the past few months has been a notable cause of concern among analysts.
Prices in second and third-tier cities are also rising sharply as the buying boom spills over, favouring more affluent second and third-tier cities such as Xiamen and Nanjing.
The coastal city of Xiamen outperformed long-time top performer Shenzhen and had the sharpest price spike, with prices surging 43.8% from a year earlier, faster than the 39.2% rise in July.
The inland city of Hefei was the second-fastest growing market according to the survey, with prices rising an annual 40.3% in August, versus a 33.8% gain in July.
In an effort to deter speculators and to cool prices, housing authorities from the eastern city of Hangzhou announced over the weekend that it would begin to restrict home purchases as of September. 19.
Families which are not registered as residents and already own one or more houses in certain districts cannot purchase another home, either new or pre-owned, under the new regulations.
Despite signs of a broadening recovery, many smaller cities still have a large glut of unsold homes.
Prices in the rustbelt city of Dandong, for example, recorded the biggest fall at 2.1%, compared with 2.4% in July.
