Factors that boost property boom in China

Amidst economic turmoil and uncertainty, China's real estate sector has managed to grow and surge in the last few months. Despite a global recession, many insiders say this could be the best year yet for China's property market.

In the crowded transaction center for property, many home buyers say it is not the first time they are buying a house and they take it as an investment.

Property investors said, "I have heard about the possibility of impending inflation so I rushed out to buy a house."

"I think the property market in Beijing will still grow. There's a lot of potential while investment in shares and gold is risky."

Experts say rich people make up the most of those investing in property.

Gu Yunchang, Vice chairman of China Real Estate Research Association, said, "Rich people are pouring their money into the market. It is because central banks in the world are working hard to print paper money and China has injected a huge amount of credit into the economy. Due to expectations of inflation, rich people are investing in housing as a hedge."

But sources say it's not just the wealthy, who are snapping up real estate.

Gu said, "The interest rate is rather low now and people worry about losses on investment in shares, gold and antiques. They believe only properties can help them avoid risks."

Sources say property developers are also contributing to soaring housing prices by hoarding their inventories of land.

Dong Fan, director of Real Estate Research Center of Beijing Normal University, said, "Some say land supplies are not sufficient in the housing market, I think this is mainly due to developers hoarding land by expanding the development period. And they didn't buy a lot of land in 2008 when the market was not sound."

Sources say housing prices have been pushed up by increase in the price of land. In Beijing, the local government is only offering 1,300 acres of land for residential buildings this year, down 24 percent from 2008.