Housing prices keep rising, despite macro-control

10:25, October 15, 2010      

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Housing prices among China's major cities rose 9.1 percent year-on-year, despite the government's sterner measures to rein in property bubbles, the National Bureau of Statistics reported on Friday. Prices rose 0.5 percent last month from August, triggering a renewed bout of public gripes about the government's macro-control effort.

And, more than 70 percent of China's top bankers say they are concerned about a drastic slump in the property prices, which will worsen their balance sheets and give a rise to the bad loans, a national survey by China's Bankers' Association has revealed on Thursday.

The worries held by the top bankers might explain why the authorities has not decided to resort to the harsh measure of imposing the property tax nationwide to dampen housing prices, a major ire of the public, experts say.

China's government has instructed a few cities, including Shanghai, Beijing and Guangzhou, to restrict permanent city residents buying only one house or apartment. Earlier, the central bank tightened down-payment requirements, raising the ratio from initial 20 percent to at least 30 percent, to rein in housing purchases.

However, prices have not made a turn yet. Some experts have estimated that Beijing will continue to gauge the price trends tentatively next year, because it cannot afford to see a big housing bubble forming in China.

"The authorities may not see the property curbs as successful until prices fall by double-digits from a year earlier, so the current restrictions may last into next year," said Zhang Zhiwei, a Hong Kong-based economist at investment bank China International Capital Corp, according to a Bloomberg News report Friday.

Year-on-year housing price gains have slowed from April's 12.8 percent, a record for the data series, which began in 2005.
Property sales by volume rose 8.2 percent in the first nine months of the year to 632 million square meters. The value of sales jumped 15.9 percent to 3.19 trillion yuan ($480 billion).

By Jimmy, People's Daily Online


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