Property prices increase in October (2)

Second-tier cities such as Chongqing and Xi'an also saw slight price rises in October, and prices in the two cities are 4.9 and 3.3 percent higher, respectively, than in October 2010.

Despite the curbing measures, such as a rise in down-payments for second and third homes, "the housing price cannot fall (substantially in first- and second-tier) cities even though the demand has been suppressed," Yin Kunhua, a professor at the Real Estate Research Centre of Shanghai University of Finance and Economics, told the Global Times.

As a result of the curbing policies, property developers have had difficulty in getting bank loans and tight cash flow made them turn to trust funds, which charge 5-8 percentage points more than the interest rates banks charge on loans. This cost will be passed on to consumers, said Yin.

The rising funding costs coupled with increasing land prices and taxes together account for about 85 percent of the price of an apartment in downtown Shanghai, he said.

We recommend:
A Decade of Fastest Development	Eastern Boom Lightens Western Gloom	Chinese firms 'potential Trojan horses'? slows
AVIC unveils new aircraft engines	Oct. data released, inflation slows	13th Int'l Automobile Industry Exhibition
China Int'l Industry Fair opens in Shanghai	Caofeidian coal wharf put into use	Galaxy Soho building in Beijing