Chinese cities are undergoing an insane housing boom with prices up as much as 43% in a year
A worker shovels concrete from a mixer outside a new apartment building in Beijing. AP Photo/Greg Baker
House prices in leading Chinese cities are exploding, according to figures from property consultancy and estate agency Knight Frank.
Eight out of the top 10 cities for fastest growing prices globally in the third quarter of the year were in China, according to Knight Frank, and 10 Chinese cities recorded annual price growth above 20%.
Prices in the Chinese city of Nanjing, the hottest property market globally, were on average 42.9% higher in the third quarter of the year than they were a year earlier.
Knight Frank's international residential research analyst Katie Everett-Allen says in a note circulated this week: "Urbanisation and rising household wealth is behind the surge in Chinese prices but it is far from uniform with smaller cities and rural markets lagging behind.
"China’s rapidly-rising urban house prices have not escaped the attention of policymakers with many cities seeing the tightening of mortgage lending, higher deposit requirements, and in some cases, a ban on non-local buyers. Home purchase restrictions even saw couples divorcing to enable them to buy more properties."
The Wall Street Journal reported in August on a rush for quickie divorces in Shanghai so they could buy an extra house.
Everett-Allen says: "Since September there is some evidence to suggest the rate of price growth has cooled in a few key cities as the new regulations have taken effect."
Average house prices across Asia rose by 12.3% in the third quarter, making it the continent with the fastest growing house prices globally. Europe recorded average growth of just 3.7%.
Vancouver and Chennai had the join biggest increase in property prices out of any city outside of China. The Canadian and Indian cities both recorded 24% price growth in the third quarter.
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