The State Council has said that the dramatic increase in property values in some cities had become a “prominent problem” after government figures released showed urban housing prices in March rose 11.7% during the previous 12 months, up from 10.7% the month before and the biggest increase since the index began nearly five years ago.
The warning came ahead of the expected announcement that the Chinese economy grew by close to 12% in the first quarter of the year, the fastest rate in three years, underlining the risk that China’s robust recovery from the global crisis could end in overheating.
Financial Times reported that if the gross domestic product data for the first quarter are as strong as expected, it will renew pressure on the Chinese authorities to begin to allow its currency to appreciate and to take other tightening measures such as raising interest rates.