Residents line up to buy cheap apartments of a newly-developed economy housing project in Beijing yesterday.

China's housing prices rose 12.9 per cent year-on-year during the January to July period of this year, the highest since 1996, the National Bureau of Statistics (NBS) said yesterday.

The average property price, involving residential, office and commercial housing, stood at 2,724 yuan per square metre during the first seven months.

The growth rates in six regions, including Jiangxi, Gansu and Tianjin, exceeded 20 per cent.

The price of office housing increased rapidly during January to July, which grew a year-on-year 32.3 per cent to 6,970 yuan per square metre.

Meanwhile, the rising momentum of residential housing price slowed down. The price reached 2,480 yuan a square metre, an increase of 10.4 per cent from the same period a year ago.

According to Chang Xiuze, a researcher with the Macro-economy Research Institute of the State Development and Reform Commission, the price climb has been stimulated by booming market demands.

NBS's statistics showed that a total of 134 million square metre of housing was sold during the first seven months this year, up 25.2 per cent from the corresponding period of last year.

At the same time, the combined sales volume reached 365.7 billion yuan, a 41.l4 per cent rise over the first seven months a year earlier.

"China's fast economic development has led to growth in people's incomes and better living standards," said Ji.

"Upgrading living conditions has been listed at the top of the agenda in many households."

To date, a greater percentage of Chinese people think the current interest rate level is unsatisfactory and have become more reluctant to make new deposits .

Furthermore, investment channels in China are rather limited at present, thus consumers prefer to pool money in the property market.

Mou Xin, marketing supervisor of Xie Cheng, a real estate consulting company, pointed out that booming market demands have also been built up by property developers.

The developers' activities mean that prices may rise sharply in the near future.

The developers say it is because the land agreement transfer system will be eliminated and all land used for real estate development should be auctioned on the public market after August 31, which implies land cost may increase.

They also indicate that investment in infrastructure renovation and environmental improvement should be reflected in the housing price, which has been ignored by the people so far.

But both Ji and Mou say they believed housing prices will grow in coming years, but just slightly.

"When the bubbles squeezed and a transparent market established, the trading cost will be reduced and housing prices will be more rational," say the two experts.

(China Daily)

year-on-year :（与上年同期数字相比）

deposit : money deposited in a bank（存款）

pool: to put together; to contribute to a common fund, on the basis of a mutual division of profits or losses（集中钱、力量等）