Home prices are booming in China as eager homebuyers max out their credit to buy one, driving the cost of a home in China rose sharply higher in October by the fastest rate in 14 months, The China Daily reports.
According to China’s National Bureau of Statistics property prices in 70 Chinese mainland cities rose by an average of 3.9 percent over the past year.
Joe Zhou, research head at property consultants Jones Lang LaSalle, said in the following months, "we expect house prices will remain at a high level, bolstered by increasingly strong demand and limited supply."
Experts say property prices — especially in Shanghai — could continue to go up at a fast rate during the next few months because of a buying spree triggered by talk of the possible removal of the favorable mortgage policy.
“Housing is really the focus because there really isn't an effective pension system in China, so individuals think of investments in property as their best insurance policy for old age,” says Arthur Kroeber head of independent economics research firm Dragonomics.
“So in addition to the pressure created by literally 10 or 15 million people moving into Chinese cities from the countryside every year and needing to be housed,” Kroeber told Radio Australia.
“On top of that you have this pressure from people already in the cities who want to buy their second house because that's essentially their retirement plan.”
© 2017 Newsmax. All rights reserved.