(SHANGHAI) China's top economic planning agency has warned that a range of economic factors were likely to push up domestic property prices in the second quarter.
Going higher: The NDRC says upward pressure on housing prices is mounting again after a slight slowdown in the first three months of the yearThe National Development and Reform Commission (NDRC) said in a quarterly report on China's real estate sector released on Tuesday that upward pressure on housing prices was mounting again after a slight slowdown in the first three months.
'Excessive liquidity and the appreciating yuan are driving asset prices including houses higher, while soaring costs of steel and labour are also pushing prices forward, especially in small and medium-sized cities,' the report said.
'Meanwhile, huge amounts of funding have fled equity markets after recent slumps . . . investors are likely to reinvest the money in property instead of bank deposits.'
The report stressed that the government must keep housing market prices stable, partly through increasing the amount of land available for residential development.
Since 2005, China has taken a number of measures, including interest rate hikes and imposing taxes, to curb rapidly rising real estate prices amid concerns of a dangerous bubble in the sector.
In the wake of those measures, soaring home prices did cool to a certain extent. Official data said earlier that property prices in 70 major cities across the country rose 10.7 per cent year-on-year in March, down 0.2 per cent from February.
China has been struggling to rein in galloping inflation, which saw consumer prices soar 8 per cent for the first quarter of the year, near a 12-year high. -- AFP
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