Guangzhou property prices set new record in June

Guangzhou property prices set new record in June
By Gareth Powell, July 12, 2007
In Guangzhou house prices grew more than RMB1,000 per square meter last month averaging a record RMB11,331. It is the biggest jump for property prices in a single month in this provincial capital.

The highest price for luxury apartments in the city’s prime locations has passed the RMB20,000 a square meter mark, catching up with those in Shanghai and Beijing. A new three-bedroom apartment in the city proper now comes at over RMB1 million.

Real estate analysts forecast the city’s property prices will maintain strong growth momentum in the second half. Huang Tao, a senior property consultant from Guangdong Centraline Property, estimates prices of commercial apartments will grow at least 20%.

Property prices in Tianhe and Haizhu districts, traditionally Guangzhou’s business hub, are expected to grow even faster. By the end of June, property prices in Tianhe had grown to an average of RMB13,721 a square meter.

Huang Tao attributed the growth of property prices to the imbalance between supply and demand in the southern metropolis. ‘There are few low-price small apartments in city proper. Prices have thus been pushed up by the large number of luxury apartments.’

A total of 696,500 square meters of new commercial apartment space changed hands in June.

There has to be a reaction to this and, indeed, property price rises have scared away many local first-time buyers. Most property buyers in these past months were buying their second apartment or changing into a bigger one.

To help cool the real estate market, Zhang Guangning, mayor of Guangzhou, promised to introduce new measures in the second half of the year. The city government will offer even more land for property development and build more budget houses for low-income families. Certainly the government cannot depend on developers to build budget houses. That is not where the money is.
Source: China.org.cn