China land prices to rise at slower pace in Q1 - ministry

BEIJING Thu Jan 16, 2014 10:16pm EST

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BEIJING Jan 17 (Reuters) - China's land prices are expected to rise further in the first quarter of this year, though the pace of increase will ease as the government keeps its tightening measures in place, the Ministry of Land and Resources said on Friday.

The average price of land for residential homes rose 8 percent to 5,033 yuan ($830) per square metre in 105 major cities in October to December 2013 from a year ago, according to a report released by the China Land Surveying and Planning Institute, a research unit under the ministry.

It was the fifth consecutive quarter of quickening land price inflation, which is a prelude to rising home prices and underlines continued upward momentum for home prices.

"The central government is not likely to loosen controls or to refrain from issuing new tightening curbs to manage the property market in 2014," the institute said in a report on its website, www.landvalue.com.cn. It also said key cities are expected to keep tightening curbs in place.

"Under such a backdrop, we expect land prices to continue to go up in the first quarter but gains will be eased," it said.

Home prices in large Chinese cities have continued to set records in the past year despite a four-year long government campaign to cool the market, adding to the threat of a price bubble and forcing some local governments into a fresh round of curbs in November.

Prices that month soared 9.9 percent from a year earlier - the quickest annual pace on record, according to Reuters calculations based on official data.

However, signs have emerged that the government's efforts to cool the market, which have included releasing more land for development, building affordable homes and curbing mortgages, may be starting to bear fruit.

A Reuters poll in November had also predicted a slowdown in house price growth, with analysts forecasting a 5.0 percent rise in house prices this year after a likely 10 percent gain in 2013.

The amount of new land supplied for residential property development hit a record high of 138,200 hectares in 2013, up 25 percent from the same period last year, the ministry said in a separate announcement on its official Weibo microblog.

($1 = 6.0557 Chinese yuan) (Reporting By Xiaoyi Shao and Jonathan Standing; Editing by Jacqueline Wong)

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