RAPID urbanization as well as robust demand for homes will continue to boost the country's real estate industry in 2008, industry analysts said.
Wei Bo, a property analyst with Central China Securities Company, sees three main factors as being responsible for the strong demand.
"New demand from the country's urbanization progress, growing requirement for larger and better homes among the Chinese, as well as rising investments caused by the appreciation of the Chinese currency and the existing negative interest rates, will probably help the real estate industry's fortune for another year," Wei said.
"We expect the industry to maintain its high pace of development and give it a 'better than broad market' rating."
China is seeing probably one of the largest urbanization in the world. According to an earlier forecast by the United Nations, between 16 million and 22 million people will migrate from rural places to urban areas in the country each year from now to 2020. The total urban population will rise by 300 million at that time, which means an additional six billion square meters of housing will be needed.
Meanwhile, growing disposable income among the Chinese will further boost demand for new homes across the country.
In the first nine months of this year, disposable income for city dwellers expanded 13.2 percent to 10,346 yuan (US$1,398) and earnings for rural households rose 14.8 percent to 3,321 yuan, after being adjusted for rises in the consumer price index, the National Bureau of Statistics said in November.
The appreciating Chinese currency, which has so far gained about 10 percent since the yuan was depegged from the US dollar in July 2005, has been attracting speculative funds from overseas to invest in the country's property market.