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Property bubble limited to some cities: official
(AP)
Updated: 2005-10-24 08:54
China is experiencing a property bubble in some cities but it is not a
nationwide phenomenon and the government is moving cautiously in reining in
prices.
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| Residents in Nanjing, capital of East China's Nanjing
Province, walk past a newly-constructed apartment building May 10,
2005.
[newsphoto] | | "Only some
cities are experiencing a bubble and it's only in some cities that housing
prices are rising relatively fast, but not in all cities," Zheng Jingping,
National Bureau of Statistics spokesman, said.
"We want to regulate and curb excessive rises in housing prices but we're not
absolutely intent on pulling down prices," he said as he delivered third-quarter
growth figures.
Zheng did not specify which cities are experiencing a bubble but Shanghai is
widely seen as a center of speculative activity.
Many economists have warned that some mainland cities are building up a
dangerous property bubble that will eventually deflate, with severe consequences
for the rest of the economy.
The government introduced measures in April aimed at cooling unrestrained
growth in the sector.
Measures vary from city to city and include a capital gains tax depending on
the length of a buyer's holding period, the banning of pre-completion sales and
a tightening of land-use rights.
Shanghai this year enacted rules requiring home owners to pay off their
mortgages before they can sell a property, while in March the floor lending rate
for housing loans of five years or more was raised 20 basis points to 5.51
percent.
Homebuyers are now also required to come up with a down payment of 30 percent
of the price, up from 20.
In another development, annual growth in urban Chinese property prices eased
for a second straight month in September amid government efforts to cool the
real estate sector, official figures showed Friday.
Overall property prices across 70 cities rose 5.5 percent in September from a
year earlier, after rising an annual 6.3 percent in August and 6.4 percent in
July, the National Development and Reform Commission said in a report on its Web
site.
Compared with the previous month, overall property prices rose 0.6 percent in
September, after rising 0.7 percent on the month in August and 0.4 percent in
July.
Of the 70 cities included in the survey, 15 recorded falling prices on the
month, led by a 1.2 percent drop in Shanghai, where prices fell 2.7 percent in
July.
Annual property investment growth has slowed steadily to 22.2 percent in the
January to September period from 26.7 percent in the first quarter.
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