Malaysia Property News is a free resource website sharing Daily Property News & information about Property in Malaysia, which related to, Property Market, Property Investment, Commercial Property , Hot Properties Malaysia, Real Estate, Retail Shop, Business Park, Condominium Malaysia, Terraces & Apartment Malaysia, Houses, Residence, Resort and many more.

Tuesday, August 11, 2009

Soaring China property sales trigger bubble fears

BEIJING: Property sales in China have soared by over 60 per cent so far this year, the government said yesterday, triggering fears of emerging asset bubbles.

In the first seven months of the year, sales of all property were up 60.4 per cent from the same period a year ago, while housing sales increased by 65.3 per cent, the National Bureau of Statistics said in a statement on its website.

"The real estate market has entered into a quite sensitive period now and bubbles have risen in some regions," Qin Rui, an analyst with house agency 5j5j here, said.

"In Beijing, house prices have far exceeded affordability for most residents," he said.

Property prices elsewhere in China picked up further in July, official figures also showed yesterday, as the effects of government stimulus efforts gained strength.

Prices of real estate in 70 major cities jumped by 1 per cent year-on-year last month, the statistics bureau said in another statement, issued with the National Development and Reform Commission.

That followed a 0.2 per cent rise in June. Until then the index had slumped for six months since December, as it was hit by previous government attempts to rein in prices as well as the global economic crisis.

Prices of new houses increased 0.3 per cent in July from a year ago, compared with a drop of 0.6 per cent in June, while those of existing houses went up by three percent, up from 2.2 per cent a month earlier, the statement said.

Since October, the government has taken a series of measures, including tax breaks and preferential rates for first-home buyers, to avoid a crash in real estate, which accounts for more than 20 pe rcent of urban fixed investments.

In addition, inflation expectations due to a surge in new bank loans this year is also driving the sector's rebound, analysts argued.

New loans for the first half of the year amounted to a record US$1.1 trillion (US$1 = RM3.50), recent central bank figures showed.

Qin said funds had flooded into the real estate and stock markets as companies sought to exploit easy bank lending policies for quick profits.

However, he predicted the government might be forced to tighten its policy, causing a major correction.

"China's real estate market ... relies heavily on capital. It will definitely be badly affected once there are changes in the supply of funding," he said.


No comments: