Home prices rise at fastest pace in China’s major cities in September
23 Oct 2013
Home prices across four major cities in China surged the most since January 2011, as concerns grew of a bubble forming. The government however, kept away from bringing in additional property curbs that would hinder economic growth.
New home prices in September were up 20 per cent in the southern business hubs of Shenzhen and Guangzhou, 17 per cent in Shanghai and 16 per cent in Beijing from a year earlier. Prices rose in 69 of the 70 cities the government tracked.
Property stocks declined in Shanghai as speculation grew that premier Li Keqiang would be forced to impose stricter policies to rein in prices and limit risks to the economy.
Li had held off tightened restrictions on property this year as his government strove to meet a 7.5 per cent annual economic growth target.
Bloomberg quoted Liu Li-Gang, a Hong Kong-based economist at Australia & New Zealand Banking Group Ltd, as saying in a telephone interview that home prices, especially in big cities were a bit out of control. He added China was faced with an increasing risk of a property bubble.
A gauge tracking property stocks on the Shanghai Composite Index (SHCOMP) declined 1.5 per cent at the close of trading, as against a 0.8 per cent drop in the benchmark.
Meanwhile, prices in four major cities Beijing, Shanghai, Shenzhen and Guangzhou rose the most after the government changed its calculation method in January 2011.
Property continues to be a popular investment choice in China and prices had now been rising for nine months in a row.
However, according to data which was released last week China's growth rate had picked up in the July-to-September period - for the first time in three quarters.
According to many observers, with the pick up in the economy and as property prices continued to rise, policymakers might soon implement measures to control speculation in the sector and also keep price rises in check.
