China's real estate prices maintained their robust growth last month, but the number of transactions involving foreign institutional investors declined due to restrictions on overseas investment.
Property prices in China's 70 large- and medium-sized cities rose 5.4 percent in October, 0.1 percentage points higher than August's rise, the National Development and Reform Commission (NDRC) said in a statement yesterday.
The sales prices of high-end and ordinary residential buildings saw year-on-year rises of 7.7 percent and 6.4 percent, up 0.7 and 0.1 percentage points compared to last month.
Beijing witnessed the biggest price rise, with year-on-year growth of 10.7 percent, while Shanghai saw its prices drop 0.6 percent compared to the same period last year.
Influenced by a government rule restricting foreign investment in the real estate sector, the number of transactions involving foreign institutional investors declined recently, according to a report by US-based consulting firm CB Richard Ellis (CBRE).
"Some overseas investors are expected to remain on the sidelines and wait for a clear direction to emerge against the backdrop of present policy uncertainties," said Ray Huang, a researcher with CBRE's Investment Properties Department.
The new policy has slowed the entry of speculative capital to China's real estate market, but benefited overseas investors adopting a long-term approach towards investment.
Meanwhile, demand for luxury residential apartments remains strong both in Beijing and Shanghai.
Fidel Ramos, ex-president of the Philippines, recently met Li Ruohong, president of Beijing King Resources Real Estate Co, a major villa developer, showing his interest in investing in China's high-end real estate sector.
Shanghai also saw robust sales at a number of new projects in the third quarter. Jing'an Four Seasons sold out all 192 available units within one month, at an average price of over 30,000 yuan (US$3,797) per square meter.
(China Daily November 14, 2006)