Second-tier cities witness property price hike

A newly completed residential building in Baoan, Shenzhen, Guangdong province, May 29, 2016 [Photo/IC]

An over-heated property market in some cities is making it hard to reduce the number of unsold homes, thus, different regulations should be applied to different cities on local levels, said industry experts on Wednesday.

According to statistics by China Index Academy, the average price of housing price in 100 Chinese cities grew 10.34 percent year-on-year, 1.7 percent growth from that of last month, the 10th consecutive month for the double hikes, reported Shanghai Securities News.

The top ten cities with the highest price increase in May are all second-tier cities. The average increase was close to three percent, which cities, such as Xiamen and Hefei witnessed a hike close to six percent.

Riding the trend, the property price of second-tier cities this year is expected to reach 30 to 40 percent.

Chen Sheng, head of China Real Estate Data Academy, said that the fast increase of housing and land prices in some second-tier cities are more or less influenced by the housing price of first-tier cities like Beijing, Shanghai and Shenzhen.

"It is unsettling that the housing and land prices hiked so much in three months when it's supposed to reach those levels in three years, " Chen said.

"The loosened monetary policy makes it easy for developers and property buyers to take loans which supported the market's turnaround."

Wang Yulin, former vice-director of Policy Research Center of Ministry of Housing and Urban-Rural Development, said that local governments should restrain the trend in time.

"There's a lot to learn from the purchase restriction measures Beijing adopted in dealing with its Tongzhou District's property market, " Wang said.