Mainland property cooling measures possible if home prices rise

Beijing may take further action to cool the mainland property market if home prices in major cities grow by as much as 10 per cent in the first half of this year, say analysts.

The caution comes as demand and price growth continues an acceleration that got under way in November last year and shows little sign of easing.

Data from the China Index Academy, a unit of SouFun Holdings, the mainland's biggest real estate website operator, shows that the average price of a new home in 100 major cities recorded an eighth successive month-on-month rise in January, to 9,812 yuan (HK$12,190) per square metre, up 0.03 per cent from December.

Quicker growth was recorded in the larger cities. In Beijing, the average price of a flat stood at 25,075 yuan per square metre last month, up 2.27 per cent from December. In Shanghai, the average price was 2.3 per cent higher at 27,655 yuan per square metre. In Guangzhou, the price rose 2.14 per cent, and in Shenzhen, it climbed 2.18 per cent.

But despite their recent surge, prices rose by about 10 per cent the whole of last year, which Sherman Lai Ming-kai, the chairman of Centaline Property Agency, described as "acceptable".

If home prices rose about 10 per cent annually, the government was unlikely to adopt new cooling measures for the market while gross domestic product growth was strong, Lai said.