Property prices in the country's 70 large and medium cities rose by 7.1
percent on a yearly basis last month despite the government's efforts to cool
down the market, the National Development and Reform Commission (NDRC) said
The growth rate, the highest since 2006, contributed to the strong economy,
"China's sizzling property market is closely linked with the overall
economy," said Anna M Kalifa, head of the research department at Jones Lang
The country's gross domestic product grew by 11.5 percent in the first half
of the year, beating experts' forecasts.
Beihai, Shenzhen, Nanjing and Beijing led the country in
terms of price increases, with growth rates of 15.5 percent, 13.9 percent, 11.3
percent and 10 percent, respectively. Beihai, a small city at the southern end
of South China's Guangxi Zhuang Autonomous Region, has been at the top of the
list for four months in a row, reflecting the strong growth in second- and
June and July are generally key times for property deals, not only in China,
but also for the entire world, Kalifa said.
"Property prices in China will continue to grow in the next half of the year,
but at a slower pace," Kalifa told China Daily. "We expect the property price to
grow by around 8 percent from January 2007 to January 2008, and we've seen most
of that growth already."
The sales prices of pre-owned houses jumped by 7.8 percent last month. That
was one percentage point higher than in May. Shenzhen and Beijing are still
among the top four cities in terms of price hikes, with growth rates of 16.1
percent and 9.4 percent, respectively.
Though the government has been adjusting its real estate policies,
skyrocketing property prices could continue to pose a risk in the second half of
the year, raising the possibility that further cooling measures could be on the
horizon, said Zhu Zhongyi, secretary general of the China Real Estate
"The government could launch measures targeting key cities if the property
markets there get out of control," Zhu said.
"And the restrained attitude towards foreign investment in the property
market shows no signs of loosening in the next six months."
Meanwhile, real estate investment jumped by 28.5 percent on a yearly basis,
topping 989 billion yuan in the first six months, according to the NDRC. That
was 4.3 percentage points higher than during the same period of last year and
1.6 percentage points higher than the first quarter of this year.
"The growth is mainly driven by second-tier cities," said Eric Chan, deputy
managing director of Savills Property Services (Beijing) Company.
"And we are still expecting more investment in the property sector in the
second half of the year, but the growth rate depends on the policy and
(China Daily 07/24/2007 page3)