China Vanke, the mainland's largest property developer, said net profit more than doubled last year as robust demand boosted prices, but warned that the market was undergoing a 'rational adjustment'. While central government austerity measures damped transactions and prices in the final months of last year, the company said the correction was healthy for the market's long-term development. Beijing is restricting financing to the property market in an attempt to prevent a growing asset bubble. 'The market is now undergoing a rational adjustment, especially around the Pearl River Delta,' chairman Wang Shi said. 'If property prices grow faster than the economy and people's incomes, the market will surely experience a correction even without austerity measures.' However, Mr Wang said reports in the media that he believed the bull-run in the property market was coming to an end were wrong. Vanke's earnings surged 110.4 per cent to 4.84 billion yuan (HK$5.33 billion) as sales jumped 98.2 per cent to 33.5 billion yuan. Rising incomes and a growing urban population have boosted demand for flats and houses. The Shenzhen-listed developer booked 6.14 million square metres of sales compared with 3.23 million sq metres in 2006. Completed properties totalled 4.45 million sq metres, up 36 per cent year on year. 'Vanke's performance has far exceeded our predictions,' Orient Securities analyst Xue Hebin said. The company declared a final divided of 10 fen per share down from 15 fen in 2006. It will also offer six bonus shares for every 10 shares held. Mr Wang said housing prices would not fluctuate greatly this year and developers would continue to benefit from a growing economy as well as rapid urbanisation. About 14 million people move to cities every year, creating enormous housing demand. However, a slowdown in the United States economy may hurt mainland exports, and other uncertainties will cloud the outlook. Mr Xue said Vanke had done fairly well selling properties during the recent low season, laying a solid foundation for growth. He said: 'The real estate market has matured and we don't expect the government to issue new macro-control policies against the real estate industry.' Vanke's share in the mainland residential property market climbed 0.9 percentage point to a record 2.07 per cent. China Vanke shares climbed 5.96 per cent yesterday to close at 24.9 yuan.