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| China Property Trend Yields to Government's Lure: Report |
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According to a recent research report by Vigers Asia Pacific, since The report showed during the first quarter of 2007, Grade-A office rent in According to Mr Kenny Suen, Managing Director of Vigers Asia Pacific, "The average GDP growth in this quarter in the above three cities exceeded 12 percent, almost doubling than that of Scrutiny of the Government's anti-speculation policy has resulted in such observations. Taking a macro view, Suen predicts stable 2007 - 2008 GDP growth in the range of 9.7 percent. "A more regulated macro economic environment will further stabilize the development of the property sector." Mr Raymond Ho, Executive Director of Vigers Appraisal and Consulting – China Operation also shares the optimism of the effectiveness of the measures on the property market in the bottom half of the year. He reasoned that "There was some blind and reckless atmosphere in the market, and since the government's tightening up, the sentiment tended to be wait-and-see." "Since the start of 2004, hyper-investment is encouraging a frenzy of construction and expanding skylines. Chinese government sought to curb buildings' excess. Tightened capital fund and lower expectations on price rise slowed the construction rate of the office projects, leaving a massive size of under-construction projects. However, restricted by the fixed construction cycle, developers have to expedite the construction works in the following months, which will boost the supply and thereafter lower the price growth." Suen believes administrative -- rather than market -- measures still are the country's best bet to regulate its economy. "Currently, the government's administrative decisions have shown effect in curbing the acceleration. Guided by the policy, Grade-A office price increase, for instance, will decelerate to around 5 – 10 percent by year-end, compared with over 10 percent price growth from 2005 to 2006" he said.
Table 1 Asian Cities Prime Office % Change vs GDP Growth
(China.org.cn May 11, 2007) |
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