China's soaring home prices may delay urbanisation efforts

Skyrocketing property prices in China may delay the process of urbanisation and lower the competitiveness of the country, said Li Daokui, a member of the monetary policy committee of China's central bank.

Mr. Li noted that potential homebuyers could not afford to acquire homes in first-tier cities like Shanghai and Beijing, and the increasing property prices in the country have become a social problem.

He added that the increasing home prices are also preventing young professionals from moving into major cities, thus hindering the urbanisation process and cutting China’s competitiveness in the long run.

Mr. Li suggested that officials should wean fiscal revenue off land sales to curb home prices.

A survey from the central bank showed that 72.2 percent of people said that property prices are “too high to accept” despite government implemented measures to curb the rising home prices.

Prices of property in 70 major Chinese cities increased 9.3 percent last month year-on-year, while home prices surged 11.7 percent and resale home prices jumped 6.2 percent.