Home prices in major Chinese cities are expected to increase this year due to further yuan depreciation and US rate hikes. (Photo: Wikimedia Commons)
Average home prices in China are projected to increase by 4.1 percent year-on-year to 7,435 yuan (S$1,544) per sq m in 2017, while property investment could grow by 5.4 percent year-on-year to 10.6 trillion yuan (S$2.2 trillion), reported Reuters, citing a state-owned newspaper report.
Concerns of property bubbles emerged last year after China registered wild spurts in property prices, especially in the biggest cities, forcing authorities to roll-out cooling measures in over 24 cities.
“Provided current policies don’t change, people will still expect home prices to rise in 2017, due to expectations of further yuan depreciation and more US rate hikes,” said the Economic Daily, citing the Chinese Academy of Sciences.
However, the academy expects the property market to experience downward pressure this year due to the tightening in monetary policy and the restrictive housing policies implemented last year.
As such, growth in total home sales are expected to ease to 5.3 percent this year, with sales by floor area marginally increasing by 1.1 percent to 1.3 billion sq m, it said.
New construction starts are forecasted to grow by 6.2 percent year-on-year to 1.78 billion sq m, it added.
Reforms in property registration and home permits are two major areas for the government to develop a long-term mechanism to regulate the real estate market, said the academy.
Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories, email romesh@propertyguru.com.sg
