Large cities see home prices rise

Property prices continued to rise moderately in November in major cities, but a strong rebound is not likely next year given the rigorous real-estate policies.

Of 70 major cities monitored, 18 saw property prices rise year-on-year, compared with 12 in October. But their average growth rate was capped at 4.7 percent, the National Bureau of Statistics said on Tuesday.

On a month-on-month basis, 35 major cities saw prices rise at an average rate of just below 0.9 percent.

Industry experts said government policies would curb sharp price rises.

Major cities are expected to see moderate price growth, while some second- and third-tier cities will experience a decline in 2013, experts said.

Property prices have fallen in third-tier cities, such as Wenzhou, Zhejiang province, and Ordos, the Inner Mongolia autonomous region. "There is still strong demand in Beijing, as seen by the recovery led by the market for older homes," said Nie Meisheng, honorable chairman of the Chamber of Real Estate Commerce at the All-China Federation of Industry and Commerce.

But a large rebound in prices is unlikely, she added.

"If there is any price hike that is much higher than GDP growth, the government will definitely launch more price control measures," Nie said.

But second- and third-tier cities would be a different story, she said, especially those already with a large amount of housing stock.

Gu Yunchang, deputy head of the China Real Estate and Housing Research Association, agreed and said the major cities will see prices increase.

Mao Daqing, vice-president of China Vanke Co, the country's largest property developer, said there would be price growth in some key cities but it will be limited.

At the weekend's Central Economic Work Conference, the government vowed to continue its tightening policies next year.

"The key to addressing skyrocketing home prices is to increase land supply," Mao said.

Land supply for property from January to November decreased 8 percent annually, but the gap may be made up with land set aside for property in December, the Ministry of Land and Resources said on Tuesday.

Liao Yonglin, director of the ministry's land use and administration department, felt confident that land supply this year would be close to the 2011 level.

He said local authorities are busy drawing plans for 2013 and land set aside for property next year will be more than the average of the past five years.

Property prices have broken records recently.

On Dec 12, China Vanke and Greenland Group purchased a tract of land for commercial use in Shanghai for a city record of 5.43 billion yuan ($862 million).

On Nov 30, Metallurgical Corp of China Ltd paid 5.62 billion yuan for a site for commercial and residential use in Nanjing, Jiangsu province, a national record.

Although Liao insisted that the two examples do not generally reflect the land market, measures will be taken to stabilize prices.

The ministry will investigate the land deal in Nanjing, he said without further information.

Liao said the ministry will ask land authorities to divide property sites which have the potential to hit record prices into smaller areas during auction or to pack "good" and "bad" sites together for sale, to lower prices.