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Subanchor: China's home prices continue to rise

01-18-2014 13:51 BJT

Home prices in major Chinese cities continued to climb in December despite repeated government efforts to cool the sector, according to data released by the national bureau of statistics today. For the 12th consecutive month, prices rose from a year earlier. The advance was led by the nation's largest cities. The pace of increase, accelerated for the 11th month in a row. For more details on the latest figures we are joined by our reporter Michelle Xing in the studio.

Q1: Michelle, it seems like no cooling measures can cool the red-hot property market in China, isn't it?

A1: It certainly looks that way from the data we got today. Let's look though the numbers first. Average new home prices in China's 70 major cities in December rose just short of 10 percent from a year earlier, the same as the previous month's record gain. Month-on-month, prices increased four tenth of a percent. All except for one city saw their prices go up last month from a year earlier.

There were some sharp increases in home prices in China's first-tier cities, Beijing, Shanghai, Shenzhen and Guangzhou. These cities have the best infrastructure. They offer the best jobs and schools and attract home buyers from the all over the country. Average home prices in Guangzhou rose the most at over 20 percent from a year earlier, in Beijing, prices were up 16% year on year. In Shanghai, prices gained over 18 percent and in Shenzhen, close to 20%.

Q2: The government has come up with various curbing measures to stabilize the housing market,what kind of impact will they have on the property market in the new year?

A2: There were certainly many curbing measures introduced last year. In the last quarter alone, around 17 cities introduced new measures to control housing prices. These measures included an increase in minimum down payment of 70 percent for people buying second homes in some first-tier cities. The government is also gradually shifting its focus from demand-side administrative curbs to supply-side market measures such as land reform, affordable housing and property taxes.

But becasue of the very strong demand, especially in first-tier cities, housing prices are expected to continue to grow. However, analysts expect that growth in China's home prices will moderate to low single digit growth this year.

In terms of transaction volume, analysts expect it to remain stable in 2014, as it is closely linked to liquidity in the system. M2 supply growth, the broadest measure of liquidity in the system, was close to 14 percent last month. Analysts say that as long as M2 supply remains above 10%, there is little chance for a rapid slowdown in the market.

Editor:James |Source: CCTV.com

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