House prices rise fast on record lending, confidence
It rose 2% in August from a year earlier, and double the gain in July, says report
11 September 2009
(BEIJING) China’s house prices in the nation’s 70 biggest cities rose at the fastest pace in 11 months on record lending and climbing confidence.
House prices increased 2 per cent in August from a year earlier, double the gain in July, according to a National Bureau of Statistics report on its website yesterday. Sales and investment in property development accelerated in the first eight months of the year from the seven months through July, the bureau said.
In fact, just yesterday, China Overseas Land & Investment agreed to pay seven billion yuan (S$1.46 billion) for a plot of land in Shanghai in the country’s biggest land transaction this year, underscoring developers’ optimism toward China’s property market.
China Overseas outbid rivals including Greentown China Holdings Ltd during an auction for the 312,600-square-metre parcel of land, which will be used for residential development.
Shenzhen and Jinhua, cities in eastern coastal provinces, led the gains as a rebound in investment and sales helps to cement a recovery in the world’s third-biggest economy. At the same time, surging prices may reinforce concern that asset bubbles may be inflating in the wake of US$1.1 trillion of lending in the first seven months of the year.
‘The continued rise in asset prices reflects the recovery in investor confidence,’ said Sherman Chan, an economist at Moody’s Economy.com in Sydney. ‘Policy makers certainly need to keep a close eye on asset prices in the near term and act fast in preventing bubbles, which could derail the economy.’
House sales jumped 69.9 per cent in the first eight months of 2009 from a year earlier to 2.35 trillion yuan, the bureau said. That was up from a 60 per cent gain in the first seven months. By floor area, sales climbed 42.9 per cent, up from 37 per cent.
Investment in property development grew 14.7 per cent during the period, the bureau said yesterday. That was an increase from 11.6 per cent.
‘Property investment will grow by 20 per cent this year, and it will continue to be a driving force for China’s growth this and next year,’ said Xing Ziqiang, an economist at China International Capital Corp in Beijing.
Central bank adviser Fan Gang said last week that property-investment growth may rebound to about 30 per cent next year.
The government’s four trillion yuan stimulus package and the credit boom helped the economy to accelerate in the second quarter from the weakest pace in almost a decade. August economic data is due to be released today.
In Jinhua, house prices rose 6.9 per cent in August from a year earlier. In Shenzhen, the gain was 6.5 per cent. Year-on-year, 15 of 70 cities posted declines. Month-on-month, none fell.
A slide by the Shanghai Composite Index has reduced concerns about a bubble in stocks. The benchmark fell 0.9 per cent as of the trading break, extending its decline from this year’s Aug 4 peak to 16 per cent. The measure is still up 60 per cent for the year.
Risks of property bubbles may show up in individual cities, rather than across the nation as a whole, according to Mr. Chan.
‘Going by recent government policy direction, which aims to promote balanced development, the central and western regions should show the sharpest improvement in investment,’ said Mr. Chan. ‘However, the latest breakdown suggests that the already-saturated eastern region also recorded a sharp increase, which could well be driven by a return of speculative investment.’
China’s gross domestic product may increase 9.5 per cent in 2010, according to a Bloomberg survey of 22 economists conducted the week ending on Aug 28. -- Bloomberg, Reuters
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House prices rise fast on record lending, confidence
It rose 2% in August from a year earlier, and double the gain in July, says report
11 September 2009
(BEIJING) China’s house prices in the nation’s 70 biggest cities rose at the fastest pace in 11 months on record lending and climbing confidence.
House prices increased 2 per cent in August from a year earlier, double the gain in July, according to a National Bureau of Statistics report on its website yesterday. Sales and investment in property development accelerated in the first eight months of the year from the seven months through July, the bureau said.
In fact, just yesterday, China Overseas Land & Investment agreed to pay seven billion yuan (S$1.46 billion) for a plot of land in Shanghai in the country’s biggest land transaction this year, underscoring developers’ optimism toward China’s property market.
China Overseas outbid rivals including Greentown China Holdings Ltd during an auction for the 312,600-square-metre parcel of land, which will be used for residential development.
Shenzhen and Jinhua, cities in eastern coastal provinces, led the gains as a rebound in investment and sales helps to cement a recovery in the world’s third-biggest economy. At the same time, surging prices may reinforce concern that asset bubbles may be inflating in the wake of US$1.1 trillion of lending in the first seven months of the year.
‘The continued rise in asset prices reflects the recovery in investor confidence,’ said Sherman Chan, an economist at Moody’s Economy.com in Sydney. ‘Policy makers certainly need to keep a close eye on asset prices in the near term and act fast in preventing bubbles, which could derail the economy.’
House sales jumped 69.9 per cent in the first eight months of 2009 from a year earlier to 2.35 trillion yuan, the bureau said. That was up from a 60 per cent gain in the first seven months. By floor area, sales climbed 42.9 per cent, up from 37 per cent.
Investment in property development grew 14.7 per cent during the period, the bureau said yesterday. That was an increase from 11.6 per cent.
‘Property investment will grow by 20 per cent this year, and it will continue to be a driving force for China’s growth this and next year,’ said Xing Ziqiang, an economist at China International Capital Corp in Beijing.
Central bank adviser Fan Gang said last week that property-investment growth may rebound to about 30 per cent next year.
The government’s four trillion yuan stimulus package and the credit boom helped the economy to accelerate in the second quarter from the weakest pace in almost a decade. August economic data is due to be released today.
In Jinhua, house prices rose 6.9 per cent in August from a year earlier. In Shenzhen, the gain was 6.5 per cent. Year-on-year, 15 of 70 cities posted declines. Month-on-month, none fell.
A slide by the Shanghai Composite Index has reduced concerns about a bubble in stocks. The benchmark fell 0.9 per cent as of the trading break, extending its decline from this year’s Aug 4 peak to 16 per cent. The measure is still up 60 per cent for the year.
Risks of property bubbles may show up in individual cities, rather than across the nation as a whole, according to Mr. Chan.
‘Going by recent government policy direction, which aims to promote balanced development, the central and western regions should show the sharpest improvement in investment,’ said Mr. Chan. ‘However, the latest breakdown suggests that the already-saturated eastern region also recorded a sharp increase, which could well be driven by a return of speculative investment.’
China’s gross domestic product may increase 9.5 per cent in 2010, according to a Bloomberg survey of 22 economists conducted the week ending on Aug 28. -- Bloomberg, Reuters
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