Home prices advance in first-tier cities in China as government efforts to curb demand in these cities prove little. In Guangzhou and Shenzhen, prices increased 20 percent year-over-years, while Shanghai seen an 18 percent advance and Beijing housing prices increased 16 percent.
According to the National Bureau of Statistics, 69 of the 70 cities tracked by the Chinese government seen price increases. With concerns of a housing bubble, local governments have tried to curb demand through reform policies, including those first-tier cities that seen double-digit increases. Reforms included higher minimum down payments on second homes as high as 70 percent of the property value. Most of the cities with ever-increasing property values are provincial capitals.
SouFun, the biggest Chinese real estate website, indicated that there was no decline in demand with December having the largest year-over-year gain in 2013 with 12 percent. The four primary top-tier cities (listed above) are business and financial districts and are seen as the most “liquid and transparent markets” in Chinese, according to broker Jones Lang LaSalle Inc.
Standard & Poor’s forecast the housing market to further increase by five percent in 2014 and home sales increasing by 10 percent. The firm believes stricter reforms will be implemented if housing prices continue to exponential increase to avoid a property bubble.