Property investment in China rose in the first 10 months of the year, but prices grew more slowly as the government tries to brake a boom in the industry.

Investment in homes, offices and other commercial real estate increased 29 percent, up from 28 percent in the first nine months of the year, the National Bureau of Statistics said.

Average property prices in China’s main cities rose 11.7 percent year on year in the first 10 months, down from the 13 percent growth in the January-September period. Prices for residential and commercial property averaged 2,758 yuan (US$333.10) a square meter, the agency said on its Web site. The average price of residential property rose 10.2 percent to 2,566 yuan per square meter between January and October.

Chinese investors invested a total of 952.6 billion yuan in real estate development in the first 10 months, up 28.9 percent from a year earlier, the agency said.

Investment in residential property rose 27.9 percent year on year to 646.1 billion yuan, with investment in office buildings up 33.8 percent and investment in commercial property up 34.7 percent.

The country’s vacant property fell 3.7 percent year on year to 97.77 million square meters at the end of September.

The government has tightened rules for lending to industries it considers overheated, including property, steel, aluminum and car making. The central bank, raised its one-year benchmark rate by 27 basis points to 5.58 percent Oct. 29, the first increase in nine years.

Last week, it cautioned banks about the risk of lending to the real estate industry in its third-quarter monetary policy report.

Investment has been fuelled by citizens piling into real estate after decades of being barred from private property ownership. Mortgage lending in China was about 2.5 trillion yuan, Xinhua said earlier this month.

(Shenzhen Daily November 22, 2004)