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Vanke boss sees bubble in spike

Tuesday, January 29, 2013

China Vanke chairman Wang Shi said mainland home prices are high and he sees bubbles forming.

"The bubble must be controlled, or both the real estate market and domestic economy will be jeopardized," the boss of the world's largest developer by turnover warned.

However, he does not think any bubbles are "set to burst" any time soon because home prices in first and second-tier cities have been under control since 2010, when Beijing executed a series of cooling policies.

But he stressed that prices now are a "bit extraordinary and high," likely due to speculative activities.

Vanke set a global record last year, selling new homes worth 141.2 billion yuan (HK$175.9 billion).

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Mainland new home prices rose for the seventh month in a row in December, according to real-estate information platform Soufun. Wang blamed limited investment channels for increased speculative activities in the mainland property market.

On whether continued urbanization would prove lucrative for the property sector, a cautious Wang said: "There won't be another investment boom in real estate.

"Urbanization will make living more comfortable, instead of turning into an opportunity for property developers to build more homes." GRACE CAO


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