[photopress:beijingproperty.jpg,full,alignright]An 11% increase on real estate prices in any year is considered more than healthy. But, on top of several years of increases and despite government action to tone it down the forecast is that the strong demand for new housing and office space in Beijing will real estate prices up by 11% in 2007. This according to a market report which predicts a slightly lower increase than in 2006.
The report was released by Jones Lang LaSalle, an international property consultant and investor, which is serious expert in this area. It said prices of newly built houses will rise between 11% and 14% this year, while the cost of renting property will remain stable or decline slightly.
According to the report, real estate prices will maintain their years-long upward momentum in the first half of 2007, and then become more stable in the latter half of the year. Predicted price increases are the result of surging economic development, rising individual incomes and the Beijing Olympic Games.
A report released by the website Sina.com and New Real Estate Magazine shows real estate prices in Beijing have increased by 42% over the past three years. The report states that in 2004 new homes sold at an average price of RMB6,178 per square meter. By 2006 that figure had soared to RMB8,792 ($976.9), a jump of 42% in three years.
Another report, by the national real estate company Homelink shows that the average cost of a home was 9.4 times greater than the average annual disposable income of Beijing families in 2005.
According to the World Bank, the cost of housing should not be more than five time sgreater than a buyer’s annual disposable income. The United Nations puts the figure at three times.
Municipal statistics show that the average family’s disposable income in Beijing was RMB51,193.7 ($6,399) in 2005, while the average price of a new home was RMB 480,000.
Sources: China Daily