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Real estate prices on the rise
By Qing Jie (China Daily)
Updated: 2004-09-18 01:03
China's real estate prices continued to surge during the first eight months
of this year due to increasing market demands and limited investment tools.
Figures from the National Bureau of Statistics show the average housing price
in China hit 2,749 yuan (US$331) per square metre from January to August, an
increase of 13.5 per cent over the same period last year.
While, the unit price was 3,421 yuan (US$412), 1,672 yuan (US$201) and 1,700
yuan (US$205) in the eastern, middle and western regions of China respectively,
up 15 per cent, 14.7 per cent and 7.7 per cent in the first eight months of last
year.
"The price climbing is stimulated by booming market demands," said Chang
Xiuze, a researcher with the Macro-Economy Research Institute of the State
Development and Reform Commission.
Along with income increases and living standard upgrades, most people first
consider improving their housing conditions.
To date, more Chinese people find the current interest rate level
unsatisfactory and have become more reluctant to make new deposits.
"Furthermore, investment channels in China are rather limited at present,
thus consumers prefer pooling money into the property market," said Chang.
Mou Xin, marketing supervisor of Xie-Cheng, a real estate consulting company,
pointed out the booming market demand was also built up by some property
developers, who said the price will rise sharply in the near future because land
cost is expected to increase.
But, both Chang and Mou believe the housing price will stay stable or only
rise slightly.
Due to the central government's restricted macro-economic control policy, the
increase rate of loans extended to property developers declined. Meanwhile, bank
loans to real estate enterprises still amounted to 211.2 billion yuan (US$25.45
billion) from January to August, a rise of 8.9 per cent year-on-year, with the
growth rate dropping 50 percentage points.
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