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 meter from January to August, an increase
of 13.5 percent 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 percent, 14.7 percent and 7.7
percent 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 percent year-on-year, with
the growth rate dropping 50 percentage points.
(China Daily September 18, 2004)