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Home buyers look to gain from rise in price
Aggregated Source: Shanghai Daily: Business

JUDY Huang, who bought a two-bedroom apartment in Shanghai's outlying Minhang District last May after digging deep into her own pocket, was pleasantly surprised to discover recently that a similar home in the same development would cost her 300,000 yuan (US$47,770) more today.

The 32-year-old white-collar worker paid about 1.6 million yuan for her 80-square-meter roughcast home, which is set to be ready for occupancy in mid-2013.

"It's somewhat beyond my own expectations," Huang told Shanghai Daily. "The misgivings I once had about the price I paid seem to evaporate now, and buying a home is surely the best decision I've made in a long time."

It is hard to estimate how many people finally stopped trying to second-guess the property market last year and decided to take the plunge into home ownership, becoming what are popularly known as fangnu, or mortgage slaves.

Recovery accelerates

A recovery in the housing sector definitely seems to be gathering pace, despite two years of government controls imposed to stop rampant speculation in real estate.

In January Shanghai's new home transactions, excluding government-built affordable housing, exceeded 1 million square meters for the second straight month, and the average price jumped 5.1 percent from December to 23,070 yuan per square meter, the highest in six months, according to Shanghai Uwin Real Estate Information Services Co.

Across China, home prices rose faster last month than in December, with nearly two-thirds of the cities monitored posting gains.

The average price of new homes across 100 major cities added 1 percent in January from a month earlier to 9,812 yuan per square meter, compared with December's 0.23 percent gain, the China Index Academy said last week.

Thirty-eight of the 64 cities that posted gains saw an increase of more than 1 percent. In December, 57 cities posted gains, with 26 rising over 1 percent.

"Major cities along the eastern coast recorded accelerated price increases in January, and that was the main reason behind a much faster pace registered all over the country," the academy said in a report.

"Moreover, improving sales in recent months, coupled with repeated vows made by the government to support demand from end-users, also helped boost confidence among real estate developers, who have become more inclined to launch high-end products to the market," the report said.

The average price for a new home in China's 10 largest cities, for instance, jumped 1.61 percent from December to 16,417 yuan per square meter in January, with Shanghai, Beijing, Guangzhou and Shenzhen all reporting gains of over 2 percent, according to the academy.

More data point to momentum in the housing market.

Developers benefit

China Vanke Co, the country's largest publicly listed developer, said in a filing to the Shenzhen Stock Exchange late on Monday that it sold more than 1.61 million square meters of new properties across the country in January, a 35 percent surge from a year earlier. The value of those properties jumped 56 percent to over 19 billion yuan.

The average price for new properties in January rose 15 percent from a year earlier to 11,837 yuan per square meter, the Shenzhen-based developer said.

Guangzhou-based Evergrande Real Estate Group, one of Vanke's closest competitors and a leader in sales volume, reported an even more notable annual growth for the first month of this year.

The Hong Kong-listed developer said properties sold surged 213 percent to 1.16 million square meters, with the value of sales soaring 226 percent to 7.25 billion yuan.

It's not just the largest players have benefited from the rebound. Sunac China, Shimao Property, Longfor Properties, Guangzhou R&F Properties and others also reported strong growth, fed by first-time buyers and those upgrading to bigger homes.

"China's real estate sector is in recovery mode, with apartment sales continuing to improve and prices bouncing back up, though the scale of the move is mild," said Standard Chartered, which has been conducting quarterly surveys of 30 developers over the past two years.

Small wonder that developers are scrambling to capture the rebound in sentiment. Land purchases are rising, and construction activity is set to pick up in the next few months, Standard Chartered's survey found.

In Shanghai, purchases of land for development surged 38 percent in January to 355,000 square meters, or worth 5.2 billion yuan, according to, China's largest real estate website operator.

Nine of the 15 plots released to the market last month were sold above the asking price, with six exceeding it by 50 percent or more, Soufun said.

"The recent land market boom is a reflection of improving investment prospects among real estate developers," said Huang Hetao, a researcher with Century 21 China Real Estate, operator of Shanghai's largest real estate chain by outlets.

"Steadily recovering buying sentiment among home seekers since the second half of last year has boosted the capital strength of many developers, as well as their confidence in the market," he added.

This is all good news to recent homebuyers like Judy Huang.

"I do consider myself fortunate," she said, adding mischievously, "for me, it is perhaps the fastest way to earn 300,000 yuan."

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