| Increase of home prices set to fall |
SHANGHAI, Apr. 28 -- The average increase of housing prices in China is likely to fall below five percent this year due to more budget homes and an expected lower demand for self-use apartments. This is the prediction of the Chinese Academy of Social Sciences in a 2007 Real Estate Blue Paper which was released yesterday.
The average housing price in the country's 70 cities rose 5.6 percent, 5.3 percent and 5.9 percent in the first three months of this year, as compared to the 5.5 percent growth for the whole of 2006, according to research jointly conducted by the National Development and Reform Commission and the National Bureau of Statistics.
Investment in real estate development nationwide will continue to grow at 20 percent this year as demand remains robust, housing prices maintain high and capital flows from other industries continue to be affluent, the paper said.
Total investment in the country's real estate sector reached 1.94 trillion yuan (US$248.49 billion) in 2006, an increase of 21.8 percent from a year earlier, the paper said. That accounted for 17.6 percent of the country's entire fixed-asset investment in the same period, a decline of 0.2 percentage points from 2005.
Banking loans, self-raised capital and overseas investment accounted for 19.6 percent, 31.9 percent and 1.5 percent of the total capital for domestic real estate development. Other sources, such as deposit and prepayment, made up the rest.
The paper said more domestic real estate companies are starting to seek diversified financial support, in addition to traditional bank loans, to further expand business.
By the end of last year, a total of 80 real estate companies - accounting for 5.6 percent of the total 1,434 firms listed on the country's two bourses - have issued shares, including both the yuan-denominated A shares and the hard-currency B shares.
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