BIZCHINA> Review & Analysis
Heed market differences
(China Daily)
Updated: 2006-10-26 09:58
Admittedly, house prices have flattened in Shanghai and even fallen somewhat in Guangzhou. But consumers in Beijing cannot expect that a turning point in the rise of local housing prices will come any time soon.

It was recently reported that house prices in Beijing soared by 10.3 per cent year-on-year in September, up 0.5 percentage points over the previous month. Clearly, the boom of Beijing's property market is far from over.

For the central government, investment in real estate totalling 1.29 trillion yuan (US$163.3 billion) in the first nine months, up 24.3 per cent year-on-year, is more troubling than comforting.

After so many tightening measures have been carried out for so long, it is time for policy-makers to examine their actual effect on different local property markets.

Though an upswing of housing prices has become a national phenomenon in recent years, it is unreasonable to expect the price trend in various regions soon to converge.

Given the huge development gap between various regions across the country, there is no integrated national housing market in the sense that there is a national capital or commodities market. Regional housing markets differ much in line with local demand and economic conditions. This is why housing prices are much higher and growing faster in a few metropolitan areas than other less-developed localities.

Hence, a general description of housing prices nationwide can hardly forecast the price trend of specific regions.


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