[photopress:property_Premier_Wen_Jiabao.jpg,full,alignright]Despite reports of doom and gloom from the real estate sector it appears that, in fact, China’s property prices in 70 major cities jumped 11.3% in January from a year earlier, the biggest increase since at least 2005, when records began.
The National Development and Reform Commission said in a statement on its Web site that January’s prices were 0.3 percentage point higher than in December. New home prices surged 12.2% from a year earlier.
At the same time inflation in China climbed to an 11-year high last month which puhed it ahead of returns on bank deposits.
Premier Wen Jiabao pledged to curb ‘excessive’ growth of property prices and spend more to build cheap homes for rent and sale to poor families.
He identified inflation and economic overheating the two top risks facing the world’s fourth-largest economy in 2008 and promised a ‘tightened’ monetary policy to cool prices.
Wang Tao, head of Greater China economics and strategy at Bank of America Corp. in Beijing, said, ‘When property prices continue to rise, it pushes people out of the market and also increases financial risks as real estate lending and investment increase too rapidly, fuelling overheating.