[photopress:chinese_real_estate.jpg,full,alignright]Tom Miller is the Beijing-based deputy editor of the China Economic Quarterly. Summing up the year in property he wrote:
In the world of real estate, government measures to cool the market in May and July failed to prevent the inexorable rise in property prices.
Prices in China’s 70 large and medium-sized cities rose 5.5% in the third quarter, with Shenzhen outpacing all other cities; Beijing, Dalian, Hohhot and Xiamen also enjoyed a strong year.
Demand for luxury residential apartments remains strong in both Beijing and Shanghai, despite July’s measures aimed at curbing speculative foreign investment in the two cities — although Shanghai was the only city in China to record negative growth in both the second and third quarters.
The central government is now targeting real estate enterprises in its efforts to cool the market.
Investigations of more than 300 Beijing property companies are ongoing, with a separate probe being launched in Shanghai. The investigations aim to crack down on illegal acquisitions of land and tax evasion.
The Ministry of Finance recently audited 39 real estate developers and found all of them cheating in their financial records. In total, the 39 developers under-reported 3.3 billion yuan of profits, amounting to over RMB 1 billion of evaded taxes. Nevertheless, property prices look set to rise in 2007.