China’s housing prices jump 3.9%, most in 14 months

BEIJING: China’s housing prices jumped the most in 14 months in October amid concern that this year’s record lending may create asset bubbles.

Housing prices in 70 major cities rose 3.9% in October from a year earlier, the statistics bureau said on its website on Nov 10.

Banks’ US$1.27 trillion (RM4.29 trillion) of new loans this year and inflows of cash from investors betting that the renminbi will appreciate threaten to create stock and property bubbles. China’s central bank and banking regulator may “soon” issue measures to limit the use of debt in real-estate purchases after asset prices climbed, a Shanghai official said on Nov 9.

Regulators may reduce “leverage ratios”, Fang Xinghai, the director-general of Shanghai’s financial services office, said at a forum in Beijing. “I would think that soon you will see these measures coming out of the central bank and banking regulatory commission.”

Price increases were led by Guangzhou in the south and Nanjing in the east, the statistics bureau said. Property sales by value jumped 79.2% in the first 10 months of the year to RMB3.15 trillion (RM1.55 trillion). By floor area, sales rose 48.4%.

China’s banking regulator plans to review debt levels at some developers on concern that borrowings are fueling excessive gains in property prices, a person familiar with the matter said last month.

Investment in property development rose 18.9% in the first 10 months of 2009 from a year earlier, the statistics bureau said. – Bloomberg LP