China prices: continual rise

Residential property prices in China will continue rising in 2010, assisted by greater level of bank lending and stronger inflationary expectations, the government's top think tank announced this morning - in the last few months Chinese property values have recovered from the market slump late last year, with the average price of a home in the country's 70 largest cities having appreciated 3.9% year-on-year in October, the fastest rate of property price growth since September 2008...

Furthermore, strong inflation is also expected to act as an incentive for investors to put more cash into property, as it is an assets that tends to benefit from rising price levels.

However, the property market is expected to stabilise towards the latter half of 2010 after China moves to tighten monetary policy, said Ni Pengfei, a researcher at the Chinese Academy of Social Sciences (CASS).

Speaking at the launch of CASS's annual housing market report, Ni said: "Our judgment is that property prices will keep rising in 2010, but that there will be some volatility."

With Chinese property prices rising, housing affordability remains a concern for many ordinary Chinese, casting doubt whether current property price rises are sustainable.

Source: www.homesoverseas.co.uk/news