China Vanke chairman Wang Shi said the mainland's property market faces the risk of a "bubble", reiterating concerns the developer raised three months ago. The bubble is not "light", Wang said at a conference in Shanghai yesterday. "If the bubble lasts, it will be dangerous." Home prices have been increasing even as the government in March stepped up a three-year campaign to cool the market. The measures have included raising down-payment and mortgage requirements, imposing a property tax for the first time in Shanghai and Chongqing, and enacting purchase restrictions in about 40 cities. New home prices jumped 6.9 per cent in May, the most since they reversed declines in December, SouFun Holdings, the mainland's biggest real estate website owner, said. Wang said in a March CBS broadcast of the 60 Minutes news programme that the housing bubble could spell "disaster" for China's real estate market and that debt held by developers is a serious problem. He said yesterday he disagreed with the news programme's conclusion that the bubble would burst immediately, as the housing market in the country was very diverse. He referred to "ghost towns" where homes are built and left unoccupied, while as much as 60 per cent of other housing projects in other cities were snapped up the first day they were put up for sale. "You can't generalise for the Chinese market," he said. "Then of course, if the bubbles are not controlled, the result will be catastrophic." The average price of a home in China's 10 biggest cities, including Beijing and Shanghai, jumped 9.7 per cent from a year earlier to 17,202 yuan (HK$21,771) per square metre last month, up 1.1 per cent from April, SouFun said. The government called for higher down payments and interest rates for second-home mortgages in cities with "excessively fast" price gains and ordered stricter enforcement of taxes, in the latest measures announced at the beginning of March. Vanke began to expand overseas this year as Chinese developers take advantage of demand for real estate around the world from Chinese nationals and as prices at home soar. Vanke signed a deal with Tishman Speyer Properties, the owner of New York's Rockefeller Centre, in February to develop two residential towers in San Francisco. In April, it entered a venture with Singapore's Keppel Land to buy 30 per cent in a Keppel unit. "There are three reasons why we invest abroad: first, we go out to industrial developed countries to learn and prepare for China's city transformation," Wang said yesterday. "Second, we would like to balance our investment. Third, we follow our customers: as Chinese buyers go to the US, so do we." Vanke has 98 per cent of its investments in China and planned to have 20 per cent internationally, Wang said without giving a timeframe. The developer has carved out a market niche for itself by focusing on smaller homes that appeal to the mass market, helping boost its sales. Property sales at the company rose 14.5 per cent to 14.2 billion yuan in May from the previous month, the company said on Tuesday. The reason Vanke had managed to do well even as the government had implemented curbs was because it targeted "the real demand", Wang said.