Property prices in China's 70 large- and medium-sized cities jumped by 9.5 percent year-on-year last month, despite a down payment hike for those buying their second apartments, the National Development and Reform Commission (NDRC) said yesterday.
The growth rate is 0.6 percentage points higher than that of September, which also saw accelerated growth.
Sale prices of new residential apartments rose by 10.6 percent on a yearly basis. Ningbo, Urumqi and Beijing led the price hike, with rates of 19.1 percent, 18.5 percent and 17.8 percent.
"The figure is within our expectations, as the government's latest restrained measures need time to kick in," said Qin Xiaomei, head of the research department of CB Richard Ellis (Beijing branch).
The central bank and the banking regulator issued a notice just before the National Day holiday that raised the down payment for property mortgage loans to 40 percent for those buying second apartments. Also, the interest rate of mortgage loans for second apartment buyers increased to 1.1 times the benchmark one-year lending rate.
On November 8, the NDRC and the Ministry of Commerce jointly released revised industry guidelines for foreign investment, adding constraints on foreign investment in real estate brokerages and existing housing transactions. And the development of common residential buildings was removed from the "encouragement category" in the new guidelines.
"But we believe the growth rate will flatten or slow down in the fourth quarter or in early 2008," Qin added.
Prices for pre-owned houses jumped by 8.7 percent last month - 1.1 percentage points higher than September. Shenzhen still tops the list in terms of price rises, with a growth rate of 21.41 percent.
According to Li Wenjie, general manager of Centaline China (North China region), factors that may influence the future trends of Beijing's property market include shrinking demand because of possible interest rate hikes due to October's 6.5 percent consumer price index, the increase of land supply and seasonal factors.
"The relationship between supply and demand remains the determining factor for the 2008 property market," Li said. "And the slowdown of soaring property prices largely depends on the supply of new land."