ON might be experiencing signs of a housing bubble, but the pace of property price growth is dwarfed by the boom in China, which yesterday said real estate prices were soaring by almost 20 per cent a year in the biggest cities.
China’s new home prices rose at the fastest rate in at least two and a half years in August,complicating government efforts to keep prices in check while supporting one of the stronger areas of the economy.
The government has tried to control property prices, wary of a potential bubble and the possibility of unrest if people are priced out of the market, but cannot push too hard as a strong property market has helped offset an economic slowdown.
“We think the government is likely keep property policy stable as the mild recovery of the broader economy is not so stable yet,” said Jinsong Du, property analyst at Credit Suisse in Hong Kong.
Prices were up around 15 per cent in annual terms in Beijing and Shanghai, and more than 18 per cent in the southern cities of Guangzhou and Shenzhen.
Average new home prices in China’s 70 major cities rose 8.3 per cent from a year earlier, according to Reuters figures based on data from the National Bureau of Statistics.
The housing ministry recently called in officials from seven cities to talk about next steps in property tightening. Zhengzhou in Henan province has subsequently unveiled new restrictions on home buying.