China’s property sales surged 60% by value in the first seven months, adding to concern that record lending will create a real estate bubble in the world’s fastest-growing major economy.
The statistics bureau said in a statement on its website that sales accelerated after a 53% gain in the first half from a year earlier. Real estate investment rose 11.6%, up from 9.9% in the six months to June 30.
The National Development and Reform Commission said in a separate statement that home prices in 70 major cities advanced 1% in July from a year earlier, the biggest increase in nine months. Premier Wen Jiabao has reiterated monetary policy will remain unchanged.
China Construction Bank President, Zhang Jianguo, said last week that the nation’s second-biggest bank will cut new lending by about 70% in the second half to avoid a surge in bad debt.
The statistics bureau said property sales by area climbed 37% in the first seven months from a year earlier,
Central bank and finance ministry officials have said they will scrutinise gains in stock prices without capping new lending. The Financial Times reported the same day that the central bank had told the largest state-controlled lenders to slow growth in new loans, citing unidentified people familiar with the matter.
Business 24/7 reported Kenneth Tsang, Asia Pacific head of research at LaSalle Investment Management, as saying that in his opinion property prices are being boosted by a lack of investment alternatives in China.
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