Tue, Aug 11, 2009 - Page 11 News List

Asset bubble fears as property market in China takes off

AFP , BEIJING

Property sales in China have soared by more than 60 percent so far this year, the government said yesterday, triggering fears of emerging asset bubbles.

In the first seven months of the year, sales of all property were up 60.4 percent from the same period a year ago, while housing sales increased by 65.3 percent, the National Bureau of Statistics said in a statement on its Web site.

“The real estate market has entered into a quite sensitive period now and bubbles have risen in some regions,” said Qin Rui, an analyst with house agency 5j5j (我愛我家我地產經紀) in Beijing.

“In Beijing, house prices have far exceeded affordability for most residents,” he said.

Property prices elsewhere picked up further last month, official figures also showed yesterday, as the effects of government stimulus efforts gained strength.

Prices of real estate in 70 major cities jumped by 1 percent year-on-year last month, the statistics bureau said in another statement.

That followed a 0.2 percent rise in June. Until then the index had slumped for six months since December after it was hit by previous attempts to rein in prices amid the global economic crisis.

Prices of new houses increased 0.3 percent last month from a year ago, compared with a drop of 0.6 percent in June, while those of existing houses went up by 3 percent, up from 2.2 percent a month earlier, the statement said.

Since October, the government has taken a series of measures, including tax breaks and preferential rates for first-home buyers, to avoid a crash in real estate, which accounts for more than 20 percent of urban fixed investments.

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