China property prices among world's fastest growing

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Amid ongoing measures to cool China’s property market, a recent report showing year-on-year growth up to June 2017 indicates housing prices in the country are still among the hottest in the world.

The ranking of 50 world cities, compiled by Hurun Report, includes 21 Chinese cities. Six of those are in the top 10, with second-tier city Wuxi in third place after registering year-on-year growth of 22.9 percent, overtaking Hong Kong to become China’s fastest growing city in terms of prices.

High-rise apartments loom overhead in Hong Kong, the fourth hottest property market in the world, according to Hurun Report. /AFP Photo‍

The top five consists of Toronto (26.1 percent), Reykjavik (23.0 percent), Wuxi (22.9 percent), Hong Kong (20.8 percent) and Zhengzhou (20.2 percent).

First-tier cities like Guangzhou (8th), Beijing (34th) and Shanghai (42nd) all feature in the top 50, despite increasingly tough measures across the country to cool down an overheated market.

Rupert Hoogewerf, chairman of Hurun Report, said “global asset allocation is one of the biggest trends now for China’s high net worth individuals, led by real estate.”

Wuxi, a key manufacturing hub in Jiangsu – one of China’s wealthiest provinces – may not be as familiar as those first-tier cities, but its close proximity to other major cities Changzhou and Suzhou, as well as high-speed transport links to Nanjing and Shanghai, could help explain what makes it so attractive to investors.

Authorities have recently sought to cool down speculation on China’s property market, with first and second-tier cities increasing required down payments for first-time buyers and investors looking to buy second homes.

A worker stands at the entrance to a construction site in Beijing on August 15, 2017. /AFP Photo

In October last year, Wuxi raised requirements for down payments on second homes to 40 percent. The move saw growth in the city slow dramatically from 8.2 percent in September to 4.1 percent in October, according to the National Bureau of Statistics.

In August, authorities in Beijing revealed proposals to help people struggling to buy homes by introducing joint property rights in the city, allowing buyers to buy a share of their properties but still have “full right of use,” according to Xinhua.

More support is being given to China’s rental market in a bid to reign in property prices. In July, Guangzhou introduced measures to give tenants the same rights as homeowners to education resources, while the Ministry of Housing and Urban-Rural Development announced that 12 pilot cities would increase rental housing supplies and set up government-backed home rental service platforms.

If successful, similar measures would likely be extended to other cities like Wuxi, Wuhan and Shenyang.