China's property market in 'big bubble'

08:51, September 03, 2010      

Email | Print | Subscribe | Comments | Forum 

The housing market in this country is in a "very big bubble" that may last until the central bank increases interest rates and Beijing introduces a real-estate tax, The Bloomberg News quoted StarRock Investment Management as saying Thursday.

"China's property market has a very big bubble, which may last for a while," Jiang Hui, investment director at StarRock Investment, said at a conference in Shanghai. "Only higher interest rates and the introduction of a property tax can bring down real-estate prices."

The benchmark Shanghai Composite Index has fallen 19 percent this year, after the government increased down- payment requirements on home sales and ordered banks to set aside more deposits as reserves to curb asset bubbles.

Even with the tightening measures, housing prices haven't slowed from record gains in 2009. Property prices in 70 major cities across China climbed 10.3 percent in July from a year earlier, said the National Bureau of Statistics.

However, Ba Shusong, deputy head of the financial department of the State Council's Development Research Center said that, although the property bubbles exist in some of the large cities, there is no evidence of a nationwide property bubble in China, according the The Bloomberg News report.

China, which hasn't raised interest rates since December 2007, may start increasing borrowing costs from the fourth quarter because of accelerating inflation, large wage increases and "loose" liquidity conditions, the report quoted RBC Capital Markets as saying. The inflation rate accelerated to 3.3 percent in July, and is widely to exceed 3.4 percent in August.

The government is still studying property tax and plans to introduce property tax reform, The Xinhua News Agency reported last week.

By People's Daily Online

(Editor:张心意)

  • Do you have anything to say?

双语词典
dictionary

  
Special Coverage
  • Premier Wen Jiabao visits Hungary, Britain, Germany
  • From drought to floods
Major headlines
Editor's Pick
  • Whitney Houston blows a kiss to the audience at the BET Honors Awards in Washington, DC Jan. 17, 2009.(Xinhua/Reuters,File Photo)
  • People are seen in a shop selling gifts for the upcoming Valentine's Day in northwest Pakistan's Peshawar on Feb. 11, 2012. (Xinhua/Umar Qayyum)
  • Villagers cast their ballots into a box while voting for deputies in Wukan Village, south China's Guangdong Province, Feb. 11, 2012. More than 6,000 villagers of Wukan, known for last year's protests over illegal land use and other issues, voted for deputies Saturday in the second round of democratic elections for new leadership. Their voting will result in a team of 107 village representatives and seven group leaders. Under the new village leadership, the deputies will attend village committee meetings, report the villagers' suggestions and complaints to the village committee and keep the villagers informed of decisions made at the deputies' meetings. (Xinhua/Lu Hanxin)
  • A model presents a creation from the REBECCA MINKOFF Fall/Winter 2012 collection during New York Fashion Week, Feb. 10, 2012. (Xinhua/Wang Lei)
  • Paul Donahoo of Australia competes during the third round of The Asian Tour of ICTSI Philippine Open Golf Tournament in Mandaluyong City, Philippines, Feb. 11, 2012. The 300,000 USD Asian Tour tournament runs from Feb. 9 to 12. (Xinhua/Rouelle Umali)
  • Visiting Canadian Prime Minister Stephen Harper looks on while his wife Laureen holds a panda at a zoo in Chongqing, southwest China, Feb. 11, 2012. (Xinhua/Li Jian)
Hot Forum Discussion