Experts: Keeping property speculation under control is a must

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New home prices in China extended another month of steady growth in November, shrugging off a range of government measures to rein in an overheated property market. Experts said that control over the property speculation will be an important part of a stable economy.

Data from the National Bureau of Statistics (NBS) shows on Monday that average new home prices in China's 70 major cities rose 0.3 percent in November from the previous month, indicating broad strength in markets nationwide.

But prices for new homes in first-tier cities fell 0.1 percent in November, after a 0.1 percent decline in October. In contrast, home prices in China's second- and third-tier cities, recorded the strongest price growth in November, rising 0.5 percent and 0.4 percent compared to last month respectively.

“Home prices are likely to maintain their steady growth next year. But the situation will differ from city to city,” said Xu Xiaole, Analyst at Lianjia Research Institute.

Professor John Gong from University of International Business and Economics shared a similar opinion, saying he expected more purchasing restrictions from the government next year to tether property speculation.

“[Xi Jinping] already stated that the housing should not be grounds for speculation, residential property should be for living in. So I think the government would impose more restrictions on the speculation investment in this area. So the property market could stay cooled for a moment,” Gong explained.

And control over the property speculation “is a driving force for the bloom of economy,” according to Laurence Brahm, founding director of Himalayan Consensus. “When you look at other economies globally, they are highly deleveraged. And deleveraging involves control over the property market.”