China’s home prices up 1.2% in January

China’s average home prices rose from year-ago levels in January for the second month in a row, signalling that the property market recovery is gaining momentum after last year’s slump, Dow Jones Newswires reported on Friday.

Analysts said the uptick in prices was due to strong demand from buyers who had rushed into the market amid widespread expectations that housing prices would climb further this year.

The average home price rose 1.2 per cent in January from the same month a year ago, data provider China Real Estate Index System said on Friday; this comes after a 0.03 per cent gain in December.

The average housing price in January rose 1 per cent from December to 9,812 yuan (S$1,923) a square metre, marking the eighth consecutive gain on a month-on-month basis. In December, prices rose 0.23 per cent from the month before.

While a thriving housing market benefits the broader economy, Beijing is wary of the political and social risks posed by fast-rising housing prices. Those concerns have intensified recently amid the growing public frustration over corruption, including anger over a spate of cases of powerful people purchasing multiple properties. China has supposedly clamped down on purchases of second and third homes, but local media have recently uncovered a number of officials using fake identification documents and unexplained funds to make multiple purchases of expensive homes.

Compared with the preceding month, housing prices in January rose in 64 cities and fell in 35 cities, while prices in one city were unchanged.

Zhengzhou, a city in central China’s Henan province, saw some of the biggest price increases in January over December, as prices climbed 3.7 per cent to 8,107 yuan per square metre. In Shanghai, prices rose 2.3 per cent to 27,655 yuan.

Source : Today – 2 Feb 2013

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