Chinese housing prices soar
By Wood Markets
Sept. 20, 2013 - China's economy and construction sector remain among the fastest growing in the world. However, as the country's economy cools from its previously red-hot levels, unease has re-emerged over housing prices and housing construction. Recently-released data from the China Real Estate Index System indicate that China's new home prices surged an average of 8.6 per cent in August 2013 in 100 cities, as compared with the same period a year earlier.
Housing prices began rising in December 2012, after China's local governments, in a bid to stimulate economic development, started to gradually loosen the restrictive policies on housing markets that were in effect in 2012. In August 2013, home values in the southern business hub of Guangzhou soared 24.2 per cent from the same month in 2012, while in Beijing they jumped 22.5 per cent, and in Shanghai prices increased by 7.7 per cent.
Demand from first-home buyers is still strong in the Chinese housing markets. At the same time, the policies that were restrictive now appear to be unravelling and it seems to be less likely for the central government to issue another nationwide policy, in the short term, to cool off the housing market, especially as the overall economy appears more fragile.
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