CHINA: A RENEWED PROPERTY FRENZY

PROPERTY RISK REIGNITING AS CHINA ECONOMY TURNS CORNER

Reuters

The Economic Times, January 17, 2013

BEIJING: Business is booming in Beijing's real estate offices -- good news for property agents like Zhang Huanhuan, but a headache for China's policymakers as worries resurface about the sustainability of investment in the sector.

"We've got off to a flying start in 2013 -- transactions are picking up, so are prices," said Zhang, a saleswoman at an outlet of Maitian Real Estate Agency Co in the capital.

Recent sales included six high-end apartments at a condominium in Beijing's Dongzhimen area, a neighbourhood favoured by the city's expatriates, she said.

Government data on Friday is likely to show China's annual economic growth rebounded to 7.8 per cent in the fourth-quarter of 2012 from 7.4 per cent in the third, snapping seven straight quarters of weaker expansion.

Chinese leaders may by reassured that the economy has finally turned the corner -- even though the recovery is likely to be tepid -- but they face a delicate policy balance amid worrying signs of a renewed property frenzy.

The home buying spree has not been confined to Beijing. New home prices in 70 major Chinese cities rose 0.3 per cent in November from October -- the fourth month in the last five to show a rise -- a modest increase but the most, nonetheless, in 19 months, official data showed.

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