The China Real Estate Association (CREA) reported on Sunday that
housing prices in China may continue to rise in the second half of
the year, following the announcement that house prices over the
first six months were up 16.34 percent.
"The disparity between tight supply and overheating demand
pushed the prices up," said Zhu Zhongyi, vice-president of the
association, at a recent forum.
Due to expectations of further hikes, ordinary consumers are
scared into buying a house for fear that they will pay even more if
they keep waiting. The growing urban population has also boosted
demand.
"These reasons for the rise in housing prices will continue to
take effect in the latter half of the year," the CREA report
said.
Zhu called on the Chinese government to take measures that are
"responsive to the current needs and problems of the real estate
industry".
In allocating the state-owned land resources, for example, the
government should encourage the efficient use of land by stepping
up the supply of affordable housing for common consumers, Zhu
said.
The government should also promote the second-hand market and
the letting market, which will help alleviate the housing pressure,
Zhu said.
The report also warned against speculation risks as more money
flowed into the real estate market.
Foreign investment jumped 68.7 percent in funding real estate
development in the first half, according to the National Bureau of
Statistics (NBS).
More foreign capital would push the prices even higher, and
could add to the list of pressures on appreciation of the yuan,
said the report.
Housing prices in major cities such as Beijing and Shenzhen have
been growing at a rate of around 10 percent for several months, and
smaller cities have also seen major increases in housing
prices.
"The actual trade price in some cities is even higher," Zhu
said.
A recent survey showed that 80 percent of the residents in
China's major cities such as Beijing, Shanghai, Shenzhen and
Tianjin believed the housing prices were too high.
(Xinhua News Agency August 13, 2007)