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Prices have risen 16% so far this year, on the back of a 22% increase last year. While volume growth appears to be robust across all segments, the rate of price increase has slowed — which may indicate some downward pressure on prices, it said.
The office space has already seen prices come off by 6% as of 1Q2010. Meanwhile, residential prices rose by 15.6% and commercial by 16.1% from the year-ago levels as of 1Q2010.
China’s low interest rates have helped drive the boom in investment and credit over the last several years. However, the days of ultra-low rates may be nearing an end, judging by the central bank’s actions so far this year, said Thomson Reuters.
Property prices have increased by about 116% from 2003 to 2009, compared with the Japanese price rise of 115% during its real estate bubble of 1985 to 1991 and the US increase of 45% between 2001 and 2006.
The office segment registered the highest price increase at 149%, followed by residential and commercial at 102% and 98% respectively,
In 2009, several new records were set in China’s real estate market; residential space saw a 53% increase in sales, while commercial and retail rose 42% and 36% respectively. Overall, the number of properties sold increased by 47% from 2008, amounting to nearly 1,800 million sq m.
The average price increased by 23% from 2008, to 4,640 yuan (RM2,185) per sq m. The office category led with an increase of 24% at 10,690 yuan per sq m, followed by commercial with 23.5% at 4,695 yuan per sq m, while residential registered 22.4% at 4,474 yuan per sq m.
The soaring prices were alarming enough for the Chinese government to introduce several measures to stem speculative investment in real estate. The latest measure imposed restrictions on pre-sales by developers.
