Property outlook index rises as efforts are made to cool market

PUBLISHED : Wednesday, 20 June, 2007, 12:00am
UPDATED : Wednesday, 20 June, 2007, 12:00am

Despite continued central government efforts to cool the real estate market, the mainland property outlook index rose last month, the National Bureau of Statistics said yesterday.

It increased to 103.32, up 1.45 percentage points from a year earlier and 0.67 points from April, the bureau said.

The index covers property prices, sales volume and consumer confidence, with a higher value indicating a more active real estate sector.

Investment in residential property totalled 504.2 billion yuan in the first five months of the year, up 29.5 per cent year on year, the bureau said.

A total of 20.8 billion yuan was injected into the construction of low-cost housing, up 39.4 per cent from the same period last year, but only accounting for around 4 per cent of total residential investment.

A Ministry of Construction rule issued in September stated that low-cost housing - flats smaller than 90 square metres - should account for at least 70 per cent of the new homes being built. The measure is aimed at ensuring adequate housing is available for those who need it most: low- and middle-income earners.

Total investment in the property sector in the first five months of the year was 721.4 billion yuan, up 27.5 per cent year on year, the bureau announced earlier.

In the first five months of the year, mainland developers registered 1.21 trillion yuan in investment capital, up 26.2 per cent from the same period last year. Foreign investment reached 22.2 billion yuan, up 89.9 per cent, the bureau said.

The area of land under development reached 97.75 million square metres, up 11.2 per cent, while the floor space of buildings under construction reached 1.56 billion square metres, up 21.9 per cent.

The central government has issued a raft of control measures to cool the housing market, such as limiting property sizes and taxing second-hand property transactions.

But statistics from the National Development and Reform Commission on Thursday showed property prices in 70 large and medium-sized cities rose by an average of 6.4 per cent year on year last month.

The prices of new homes rose 6.6 per cent and those of existing homes by 6.8 per cent, the commission said.