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Friday, March 12, 2010

China property boom 'not bubble'

SINGAPORE: CapitaLand Ltd, which has Chinese properties valued at more than US$14 billion (US$1 = RM3.32), said demand in China is "strong" and the real estate boom can't be called a bubble.

Still, the Singapore-based developer said it was "comforting" that the Chinese government is taking steps to rein in the market, according to a CapitaLand presentation filed to the Singapore Exchange yesterday.

CapitaLand, Southeast Asia's biggest developer, has said it plans to expand its China business to 45 per cent of its operations within five years.

China's property prices rose at the fastest pace in almost two years in February, adding urgency to the government's efforts to damp speculation and increase the amount of affordable housing.
Residential and commercial real-estate prices in 70 cities climbed 10.7 per cent from a year earlier, the statistics bureau said on its website on Wednesday, topping a gain of 9.5 per cent in January.

To cool speculation, China is requiring a down payment for land purchases equal to 50 per cent of a plot's price, the Ministry of Land and Resources said on its website late on Wednesday.

The government in January re-imposed a tax on homes sold within five years of their purchase, after having cut the taxable period to two years in January 2009 to bolster a then-flaging market.

Bank of China Ltd said on February 3 that it had reduced discounts for some mortgages, citing concern about rising property market risks.

By Bloomberg

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