China housing prices forecast to grow 5pc through 2025, says report

PUBLISHED : Wednesday, 02 January, 2013, 12:00am
UPDATED : Wednesday, 02 January, 2013, 5:12am

The average home price on the mainland is forecast to increase to 10,224 yuan (HK$12,550) per square metre by 2025, up 105.16 per cent compared to the price in 2011, according to Jefferies Hong Kong.

The average home price in 2011 was 4,993 yuan per sq metre.

China's average residential housing price dovetails with the nation's gross domestic product figure, said Christie Ju, an equities research analyst at Jefferies, in a research report released last month.

Historically, housing prices have tracked GDP trends perfectly over the past 20 years, according to Jefferies.

"From 2013 to 2025, we expect the national housing price to grow slightly below GDP (at 5 per cent compound annual growth rate ), capped by government tightening measures," said the report.

Meanwhile, Alan Jin, property analyst at Mizuho Securities Asia, predicts the average selling price of homes in China this year will grow 10 per cent year on year, compared to 5 per cent growth last year.

He expects tier-one cities to post sales prices increases of 10 to 15 per cent.

Average selling prices in second-tier cities are forecast to grow 10 pe cent, while the rest of the country will see rises of five to 10 per cent.

Mizuho forecasts 10 per cent growth in sales volume this year.