Property prices in the country's 70 large and medium cities rose
by 7.1 percent on a yearly basis last month despite the
government's efforts to cool down the market, the National
Development and Reform Commission (NDRC) said yesterday.
The growth rate, the highest since 2006, contributed to the
strong economy, experts said.
"China's sizzling property market is closely linked with the
overall economy," said Anna M Kalifa, head of the research
department at Jones Lang LaSalle Beijing.
The country's gross domestic product grew by 11.5 percent in the
first half of the year, beating experts' forecasts.
Beihai, Shenzhen, Nanjing and Beijing led the country in terms
of price increases, with growth rates of 15.5 percent, 13.9
percent, 11.3 percent and 10 percent, respectively. Beihai, a small
city at the southern end of South China's Guangxi Zhuang Autonomous Region, has been at
the top of the list for four months in a row, reflecting the strong
growth in second- and third-tier cities.
June and July are generally key times for property deals, not
only in China, but also for the entire world, Kalifa said.
"Property prices in China will continue to grow in the next half
of the year, but at a slower pace," Kalifa told China Daily.
"We expect the property price to grow by around 8 percent from
January 2007 to January 2008, and we've seen most of that growth
already."
The sales prices of pre-owned houses jumped by 7.8 percent last
month. That was one percentage point higher than in May. Shenzhen
and Beijing are still among the top four cities in terms of price
hikes, with growth rates of 16.1 percent and 9.4 percent,
respectively.
Though the government has been adjusting its real estate
policies, skyrocketing property prices could continue to pose a
risk in the second half of the year, raising the possibility that
further cooling measures could be on the horizon, said Zhu Zhongyi,
secretary general of the China Real Estate Association.
"The government could launch measures targeting key cities if
the property markets there get out of control," Zhu said.
"And the restrained attitude towards foreign investment in the
property market shows no signs of loosening in the next six
months."
Meanwhile, real estate investment jumped by 28.5 percent on a
yearly basis, topping 989 billion yuan in the first six months,
according to the NDRC. That was 4.3 percentage points higher than
during the same period of last year and 1.6 percentage points
higher than the first quarter of this year.
"The growth is mainly driven by second-tier cities," said Eric
Chan, deputy managing director of Savills Property Services
(Beijing) Company.
"And we are still expecting more investment in the property
sector in the second half of the year, but the growth rate depends
on the policy and investment environment."
(China Daily July 24, 2007)
