Property prices in China rose

Property prices in China roseProperty prices in China rose to a record in March. This indicates that government efforts to stem the price increase is not running. Required more drastic measures amid concerns that the bubble in the national housing market. Price of residential and commercial real estate in 70 cities in China increased 11.7 percent compared to last year, according to official figures from National Statistics Bureau.

Haikou, capital city of Hainan Province, south China's island, the biggest gain, with a jump of 53.9 percent of the overall property prices. Sanya, on Hainan is also the host of the Miss World beauty pageant, followed by an increase of 52.1 percent. Both cities are also at the peak in profitability over the price of new houses built, d ith prices rose 65 percent in Haikou and Sanya rose 58 percent.

Property prices in Hainan, which is located in the South China Sea, China surged after the government announced plans to convert the island into an international tourist destination.

China has raised the value of the mortgage and back taxes on home sales in the first two months to reduce the risk of asset bubbles. The Government announced in March that the developers are required to pay more for the purchase of land and prohibit banks provide loans to those who buy land only to pile up the soil, as a step to anticipate higher prices.

"This data is bad news. This means that the monthly profits back up quickly after a time to slow down by 0.9 percent in February. We expect the next policy of the Government of China to slow the real estate market," said Dariusz Kowalczyk, Chief Investment Strategy Markets in SJS Hong Kong.

Interest rates must rise, said Brian Jackson, an expert on marketing strategy Royal Bank of Canada is headquartered in Hong Kong. "To convince home buyers that the government had a commitment to overcome the overheating property market and reduce the risk of the property bubble, Beijing should use its policy of all devices, and particularly raising interest rates," he said.

Meanwhile, Lee Wee Liat, an analyst at Nomura Holdings said that property taxes can help, but it takes more steps to overcome this.

This can be tried in a number of cities that experienced the bubble properties such as Beijing, Shanghai, Chongqing, and Shenzhen. But the situation is serious enough, according to hedge fund managers James Chanos who declared that "China is currently engaged to hell." Last week he declared, "They were not able to lower property development has become a kind of opiate. It was merely to maintain the economic growth that continues to grow."

According to Lee, some developers skeptical kenaikana property prices and delaying the development until the fourth quarter of this year so there was no supply in the market.

It is the developer of China announced the increase of sales in the first quarter of this year. Evergrande Real Estate Group said penjaualan leap as much as 175 percent in the first three years rather than 2010, while China Overseas Land & Investment sebear reported 48.3 percent increase.