Dizano News – Property prices in China continued to rise in July, underlining the challenge the authorities face as they try to control the sector’s growth.
China has been trying to control speculation in its real estate sector, a key driver of its economic growth
Prices of new houses rose in 69 of 70 major cities, compared with a year ago.
China has unveiled a series of measures in recent times to curb speculation in the sector, amid concerns of asset bubbles forming in the country.
Analysts said that despite the curbs, demand for property investment remained high in China, driving up prices.
“Real estate is one of the few options available to Chinese looking to invest their savings,” said Patrick Chovanec, chief strategist at Silvercrest Asset Management.
“And so far it has given lucrative returns, which means that even more people are lining up to cash in on the sector’s growth.”
However, he added that the continued rise was not sustainable in the long run as the properties were not generating the kind of returns that would justify the prices that people were paying for them.
He said that policymakers needed to come up measures to address the issue, in the absence of which there was a big risk of asset bubbles being formed.
Implementation concerns
Source: China home prices continue to rise in July
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