Property prices in China's 70 large and medium cities jumped by
6.4 percent year-on-year in May despite the government's measures
to cool down the market, the National Development and Reform
Commission said yesterday.
Experts, however, attributed last month's rise, which was 1
percent higher than that in April, to the "seasonal factor".
Five cities saw a double-digit growth in the prices of new
houses, and Shenzhen lead the pack with a 12.3 percent hike.
Beijing witnessed a 10.3 percent increase.
"The seasonal factor is one of the major causes for the jump in
prices because May usually sees very brisk transactions in the
property market," said Richard Wang, associate director of the
consulting and research department of international property
consultants Debenham Tie Leung.
The bullish stock market and people's wait-and-see attitude had
slowed the growth of property prices in the first quarter, Wang
said.
Besides, as the risks in stock trading became clearer with a
couple of sharp drops in the Shanghai Composite Index, more capital
has started flowing back into the property market.
Wang said that with the Olympic Games just over a year away,
"Beijing's property price is very likely to continue growing in the
coming months".
According to Nick Loup, managing director of Grosvenor Asia,
China's residential price is expected to see an overall increase of
5 to 10 percent this year. Grosvenor is a British property firm
with three funds in Asia focusing on the real estate sector of Hong
Kong and Japan.
Pre-owned house sales, too, increased 6.8 percent last month. It
was 0.7 percentage points higher than that in April. Shenzhen and
Beijing are still among the top four cities in terms of price hike,
with a growth rate of 13.9 percent and 9.7 percent,
respectively.
"We expect the price rise to accelerate in the next few months,
a usually hot season for property transactions," said a trader with
Homelink, a major real estate service firm.
Investment in Shanghai's property market reached 50.4 billion
yuan (US$6.46 billion) in the first five months of this year, up
11.2 percent year-on-year.
The growth rate of investment in Beijing's property market,
however, fell in May, according to Beijing Statistics Bureau. About
53.3 billion yuan was poured into real estate projects from January
to May, with the growth rate being 0.8 percentage points lower than
that in January-April.
According to the latest statistics, transactions in the Shanghai
housing market in May hit a two-year high even after the central
and local governments had introduced new policies to bring down the
skyrocketing prices.
A total of 2.66 million sqm and 21,848 apartments were sold in
May, up 34 percent and 31 percent, respectively over April.
(China Daily June 15, 2007)