Strong demand for new housing and office space in Beijing is expected to bring real estate prices up by 11 percent in 2007, a slightly lower increase than in 2006, according to a market report.

The report, which was released by Jones Lang LaSalle, an international property consultant and investor, said prices of newly built houses will rise between 11 percent and 14 percent this year, while the cost of renting property will remain stable or decline slightly.

According to the report, real estate prices will maintain their years-long upward momentum in the first half of 2007, and then become more stable in the latter half of the year.

There will be sufficient office space in 2007, Beijing has 300,000 square meters of office floor space at the fourth quarter of 2006, and the figure will be more than triple to 1 million square meters in 2007.

Price increases are the result of surging economic development, rising individual incomes and the Beijing Olympic Games.

Investment in real estate projects amounted to 136.2 billion yuan (US$17.5 billion) in Beijing over the first 11 months of 2006, a growth of 15.1 percent from the same period of 2005, according to the municipal bureau of statistics.

China's housing prices were on an upward track in 2006, with prices in 70 large- and mid-sized cities rising 5.3 to 5.8 percent.

(Xinhua News Agency January 6, 2007)