Chinese Mandarin - Rising house prices show no sign of stopping

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BIZCHINA / Center

Rising house prices show no sign of stopping

(Xinhua)
Updated: 2007-08-14 10:52

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Residential buildings in Huaibei, Anhui Province. The China Real Estate
Association?reported on Sunday that housing prices in China may continue
to rise in the second half, following the announcement that house prices
over the first six months were up 16.34%. [newsphoto]

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.

(For more biz stories, please visit Industry Updates)

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