china to step up property calming measures
News Posted On: 15 July 2011
China has announced it will step up measures to ensure excessive property price increases are controlled. The government also plans to extend limits on home purchases which are already in place in larger and more affluent cities, to smaller and less wealthy areas where property prices have been rising too fast. In addition it intends to rein in any sharp increases in housing rents, and will make sure that the construction of 10 million affordable homes begins by the end of November.
Last week the central bank raised interest rates for the fifth time since October, even as Chinese developers were posting gains for the first half of 2011, with the number of transactions increasing by 31% from May to June. Experts feel that this is a critical moment for the government, and that if they don't continue to try to rein in price increases then the market will rebound strongly. At the moment the measures already implemented haven't shown any appreciable effects.
In June the value of China's housing transactions was 499.2 billion yuan, compared with 380.9 billion yuan in May. According to data released by China's statistics bureau, sales during the first half of the year increased by 22% to 2.1 trillion yuan compared to a year earlier. The country's biggest developer, China Vanke Co., has reported that sales increased by 79% during the first six months of this year to 65.7 billion yuan.
Property prices in China have increased as the economy has expanded, and the economy grew by 9.5% during the second quarter compared to a year earlier, which is slightly less than the 9.7% growth recorded during the first quarter of the year.
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Written by Les Calvert
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