Real Estate

China’s home prices rose for the eighth consecutive month in April, Soufun Holdings Ltd. said today, defying government steps to cool prices.

The latest gain underscores the challenge facing Premier Wen Jiabao, who said May 1 that the nation is “determined” to bring down housing prices in some cities to a “reasonable” level. Home prices rose 0.4 percent in April from March and climbed in 77 of 100 cities tracked by the nation’s biggest real-estate website owner.

Wen said the government is committed to bringing down some cities’ property prices during a visit to a construction site in Beijing, the official Xinhua News Agency reported yesterday. The comments may help correct a misconception in the stock market that the government only wanted to curb increases, according to Credit Suisse Group AG.

china property

China’s real-estate market is a “particular source of risk” to growth given the importance of property construction to the world’s second-biggest economy, the World Bank said today.

“Shocks to the property sector that would slow down construction significantly could have a large impact on the economy and on bank balance sheets,” the Washington-based lender said in its China Quarterly Update released in Beijing. “A property downturn could affect the finances of local governments, which do a lot of the infrastructure investment.”

Regulators told China’s banks last week to conduct more stress tests on their real-estate lending as the government steps up efforts to curb surging housing prices. A potential rise in bad debts on property loans and credit to local government financing vehicles risks triggering another state- funded bailout, Fitch Ratings said this month.

“With tension between the underlying upward housing price pressure and the policy objective to contain price rises, interaction between the market and policy measures could lead to a more abrupt than planned downturn in the real-estate market,” the World Bank said in its report. High property prices should be controlled through “macroeconomic levers” rather than administrative measures, the bank said.

The World in Guangzhou ranked first on the list of China's top ten luxury homes in 2011 released Tuesday, the Beijing times reported.

Organizers considered image awareness, quality price ratio, return on investment ratio and owner satisfaction, according to the report.

Tomson Riviera in Shanghai ranked second, followed by Oriental Xanadu in Dalian, a coastal city in Northeast China.

Among the ten most luxurious homes, three are located in Beijing, three in Shanghai and two in Shenzhen.

This list was released by the China Real Estate Enterprises Combination Association, the World Executive Group, the World Real Estate Academy and the CEO-ZINE magazine.

Beijing is seeking nongovernment capital to contribute 60 percent of the budget and may encourage it to fund the city’s subsidized housing construction, Beijing News reported Saturday.

The municipal government will also broaden the investment fields for private capital funds. The proportion of the total budget that came from private investors rose from 43.2 percent in 2009 – after the financial crisis hit the global economy – to 57.9 percent in 2010. The city plans to increase that number to 60 percent of the budget this year, according to the report.