BEIJING (Reuters) - China’s land price inflation for residential homes is expected to quicken this year after picking up in the fourth quarter, the Ministry of Land and Resources said on Tuesday, amid growing expectations that the property market is rebounding.
The average price of land for residential homes rose 1.2 percent to 4,620 yuan ($740) per square meter in 105 cities between October and December compared to the third quarter, the ministry said. Prices had risen 0.9 percent in the third quarter.
Rising land prices may fuel speculation that China’s property market, which has picked up after the central bank cut interest rates last year to shore up the economy, is on a sustainable rebound.
Home affordability in China is near record lows and vexes Beijing, which has tried to calm the property market for three years over fears that steep prices would fuel social discontent.
“Improving economic data and the rebound in property investment and sales have underpinned the mild recovery in land prices in the fourth quarter,” said Zhao Song from China Land Surveying and Planning Institute, a research unit under the land ministry.
“We should be wary of looser liquidity conditions offsetting the effect of property controls in 2013,” Zhao said.
On an annual basis, prices of residential land also rose 2.3 percent in the fourth quarter, up 1.2 percentage points from the previous three months to end five consecutive quarters of slowdown.
Land prices in Chinese cities along the Pearl River delta, an export stronghold that houses Guangdong, rose the fastest in China in the fourth quarter, the ministry said.
A private survey showed average home prices in China’s 100 largest cities rose 0.2 percent in December from November in the seventh straight month of increase, reinforcing signs of a recovery in the property market.
Reporting By Xiaoyi Shao and Koh Gui Qing; Editing by Jeremy Laurence