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Money flows from stocks to property

By Jin Jing (China Daily)
Updated: 2007-07-31 09:25

According to statistics from the People's Bank of China, the increase of
loans outstanding in June alone was 451.5 billion yuan, while it's only
247.3 billion in May. Of the additional increase of 56.6 billion yuan
loans from the same time a year ago, 79.9 percent were household loans.

"Since the majority of household loans were mortgage loans, it's clear
that more funds have been relocated to the property market lately," said
Shen Minggao, an economist at Citigroup.

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"Investments in luxury residential properties also shot up as many
investors cashed out of the Shanghai stock market and turned to luxury
properties as long-term investments," said Lina Wong, managing director
of Colliers, an international real estate service provider.

In line with the increased transaction volume, selling price for luxury
properties grew 2.7 percent in the first half, compared with 3.5 percent
in the past 12 months. The rents also grew 2.9 percent, while it rose 3.8
percent from last June.

Worldunion said it's like the two markets are on a seesaw, when "one goes
up, the other comes down."

The National Bureau of Statistics has announced that China's real estate
investment rose 28.5 percent from a year earlier to 988.7 billion yuan in
the first half of 2007.

"Anticipation of further renminbi appreciation should secure a continuous
inflow of foreign capital and help fuel the property market," said Wong
of Colliers.

(For more biz stories, please visit Industry Updates)

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