Property prices in the mainland China will continue to grow despite a series of tightening measures implemented by the central government, according to a report released by Knight Frank.
Knight Frank’s researchers indicated that the property measures would not have a long term effect on the market, as many developers have already hit their sales target for 2010 and thus unlikely to cut property prices to boost sales revenue.
In fact, the average price for new homes in ten major cities rose 4 percent month-on-month. This takes into account the differences in property location, quality and whether they are completed pre-sale units. Eight out of 10 major cities showed a month-on-month growth, with Hangzhou recording the highest increase of 10.1 percent followed by Beijing with 7.1 percent and Tianjin with 5.6 percent.
The property measures implemented by the central government in September include at least a 30 percent increase in the down payment ratio on first home purchases and restricting banks from lending to buyers who already have two homes. Beijing also imposed limits on the number of homes for each family, and some cities like Shanghai, Guangzhou, Shenzhen and Xiamen have followed this measure.
Knight Frank said these new policies showed that the central government has tried to adopt administrative and rationing measures coupled with credit and monetary tightening in a move to effectively curb the country’s red-hot property market.