Friday July 3, 08:07 AM
New bubbles rising in China property market: media
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BEIJING (AFP) - China's recent moves to ease curbs on the real estate sector have sent prices soaring recently, stoking fears that new property bubbles are forming, according to state media.
Residential property prices in Beijing's Central Business District rose 6.5 percent in the past week and demand for second-hand houses in some other areas is four times the supply, said the China Daily, citing brokerage Homelink.
It said a land parcel in Beijing, which was withdrawn from a public tender due to a lack of bidders only 15 months ago, was auctioned off Monday for a record 585 million dollars.
"The bidders have gone irrational. A bubble in Beijing's property market is definitely there," Pan Shiyi, one of the bidders that day and chairman of leading developer SOHO China (0410.HK - news) , said after the auction, according to the report.
In Shanghai, developers of the luxury Tomson Rivers apartments, priced at over 14,600 dollars per square metre (about 1,360 dollars per square feet), sold at least 10 units in June, the report said.
That compared with sales of only four units since the project was marketed four years ago, it added.
In the southern city of Guangzhou, the downtown housing price reached 1,600 dollars per square metre in May, close to the record high of 1,700 dollars in October 2007, the report said.
"One thing we are concerned about is whether there is a new bubble being shaped," the report quoted Gu Yunchang, secretary general of the China Real Estate Association as saying. "The possibility of a bubble is pretty big."
China's real estate industry was dealt a heavy blow after Beijing introduced new measures in 2007, including raising down-payments on second homes to rein in market speculation, which led to slumps in prices and transactions.
However, the financial crisis prompted authorities to relax the curbs, with local governments relying on preferential policies to boost demand, as the sector is a key driver of growth, the paper said.
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