China: Real Estate Prices Rose By 0.53% In May2 June, 2011, 13:00. Posted by Zarathustra
Tags: Bubbles, Real Estate
The CREIS 100-city real estate prices indices indicated that property market in China is still very resilient despite lower transaction volumes on the back of aggressive tightening measures.
Overall, the 100-city index rose 0.53% on an month-on-month basis, within which 76 of the cities recorded gains, 3 cities were flat, while prices in 21 cities dropped. On an year on year basis, prices in 100 cities rose 5.12%.
For the top 10 cities, prices rose by 0.11% in May vs. April. On an year-on-year basis, prices rose by 3.94%.
On the whole, it seems that property prices are still staying high stubbornly despite aggressive prices curbing measures and lower transaction volumes. This situation may not last forever as the real estate market is so quiet that developers will sooner of later cut prices as their finances become more stretched.
This is also one of the big reason why the People’s Bank of China cannot stop tightening monetary policy at this stage, because that will most probably make inflation and property prices rise again, which are absolutely not their policy objectives for the moment.