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China's property prices continue to rise

By Hu Yuanyuan (China Daily)
Updated: 2006-07-21 08:37

Property prices in China's major cities kept rising in June despite several rounds of government control measures intended to cool the sector.

Property prices in 70 large cities rose by 5.8 per cent year-on-year, 0.7 percentage points higher than the growth rate in May, according to a survey jointly released yesterday by the National Development and Reform Commission and the National Bureau of Statistics.

"As the second and third quarter is usually the hot season for the property market, the climbing prices are understandable," Richard Wang, a researcher in Beijing with the global real estate consultancy DTZ Debenham Tie Leung, told China Daily.

"Besides, since some of the macro control measures are just guidelines, the local governments are still working on detailed regulations, so it will take some time for those policies to take effect."

Wang said he believes the figures for July will be a better indicator of how the macro policies work.

Since April the central government has introduced a series of measures to try to cool the market, including raising the one-year benchmark lending rate by 27 base points to 5.85 per cent, increasing down payments from 20 per cent to 30 per cent and introducing a minimum capital adequacy ratio of 35 per cent for property developers.

Prices for newly-built homes climbed 6.6 per cent last month compared with a year earlier, 0.5 percentage points higher than the previous month.

Residential property prices in Shenzhen, a booming city in South China's Pearl River Delta region, jumped 14.6 per cent on a yearly basis, boasting the highest increase among the 70 cities surveyed.

The next highest rise was in Beijing, which reported a 11.2 per cent year-on-year hike in residential property prices.