Thursday, November 12, 2009
What Americans wouldn't give for a chart of home prices that looks like the one below from this report in CHINADaily. Granted, a year-over-year increase of 3.9 percent isn't much compared to what was seen during the halcyon days of the global credit bubble a few years ago, but for 2008 to 2009, it's pretty good.
The cost of a home in China rose sharply in October, with the price surging up at its fastest rate for 14 months.As a point of reference in the U.S., as of August, the 20-city S&P Case Shiller Home Price Index was reported at about 11 percent below year ago levels.
According to the National Bureau of Statistics (NBS), property prices in 70 Chinese mainland cities rose by an average of 3.9 percent when compared to their price last October.
Nationwide, the price of new homes rose in 62 cities in October compared to a year earlier. Guangzhou reported the biggest rise - 12.1 percent - followed by Jinhua, Zhejiang province, which jumped by 11 percent.
It's nice to see that, in some parts of the world at least, the housing bubble has not died a complete death. In fact, in parts of China, it appears to be alive and well.
Experts say property prices - especially in Shanghai - could continue to go up at a fast rate during the next few months because of a buying spree triggered by talk of the possible removal of the favorable mortgage policy.Joe Zhou sounds a lot like a 2005-era David Lereah of the National Association of Realtors.
Fang Xinghai, director of Shanghai's financial services office, suggested at an annual financial meeting last Monday that the government might be prompted to tighten its loose monetary policy in a bid to clamp down on excessive speculation. Experts fear such speculation could feed a property market bubble.
Fang's observation was taken seriously by many would-be homebuyers.
Thirty-year-old Luo Yan and her husband raced to complete the purchase of a three-bedroom apartment in Shanghai with the help of an 800,000 yuan ($117,000) mortgage. The amount they borrowed was the maximum they qualified for.
"I am afraid that if we don't do something now, we will certainly miss the boat," Luo said.
Joe Zhou, research head at property consultants Jones Lang LaSalle, said in the following months, "we expect house prices will remain at a high level, bolstered by increasingly strong demand and limited supply."