House prices continue to rise in many Chinese cities

Prices of both new and existing homes continued to rise in many Chinese cities in September. Of a statistical pool of 70 major Chinese cities, 65 cities saw a month-on-month rise in the cost of new homes, the National Bureau of Statistics said. According to the bureau, 63 cities also reported month-on-month price gains for existing and second-hand homes, compared to 58 in August. Growth rates in first-tier cities were significantly higher in big cities compared to second- and third-tier cities. Large cities such as Beijing, Shanghai and Guangzhou saw the most dramatic price increases. Beijing led the rise in the average cost of a new home among the 10 biggest cities in the month, with the price surging to 30,497 yuan RMB per square meter. "The market is polarized, with excessive resources concentrated in first- and second-tier cities, and it's time to let the market play a better role to balance it," said Zhang Dawei, director of Centaline Property's research center. Measures have been taken to restrict on purchases of second and third homes, to require higher minimum down-payments and to impose tax in some cities on multiple and non-locally owned homes. Beijing as one of the major cities, has introduced stricter measures to calm rising high home prices, vowing to boost supply for middle-income families. A new category of housing for the middle-income will be introduced, said an official from Beijing Municipal Commission of Housing and Urban-Rural Development. These homes will be 30 percent less in price than normal residential real estate. Seventy thousand homes targeted at middle-income families will be introduced this year and next; and these homes can be bought by migrant families that meet the government's criteria, he said.