In China, New Home Sales Are Up, Up, Up

China’s central bank has been aggressively fighting inflation and higher rates have suppressed the performance of Chinese stocks, which are in negative territory for the year. But real estate remains on a tear. Nanching in China’s center and Urumqi in the west posted the biggest year-over-year gains, according to Bloomberg, up 9% and 8.8%, respectively.

The across-the-board gains in Chinese real estate may come as a surprise to Standard & Poor’s, which downgraded the country’s property development sector to negative from stable six months ago. S&P analyst Bei Fu said at the time: “We’re likely to see more negative rating actions among Chinese developers in the next six to 12 months because tightened onshore credit conditions and [an] increasingly restrictive government policy are likely to drive weak sales for the remainder of the year.”

China’s central bank has raised interest rates three times this year to suppress credit. If China really is experiencing a property bubble–a conclusion not all analysts agree with–the economic repercussions of a popping of the bubble would likely weaken one of the few remaining pillars of an already ailing global economy.