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HONG KONG-According to analysts the rising price of land in China will soon slowdown. The slowing increase is not due, however, to the global economic crisis but rather to the fact that there will be a large amount of new supply thanks to the Chinese government’s land auctions, according to a report in Market Watch.

“Compared to the 2006, 2007 and 2008 levels, the amount of land in the market in 2009 looks significant – a supply avalanche indeed,” Nomura International analyst Wee Liat Lee and Alan Jin wrote in a report the article quotes. “Historically, when land purchase grows in the high double-digit rates, growth in property prices also moderate into the single-digit levels. We expect this to happen into 2010.”

Property prices have risen significantly during 2009, due in part to lower interest rates and increased bank lending. These two factors helped mainland Chinese companies rebound. For instance, a number of companies have doubled their 52-week lows, such as China Overseas Land & INvestment, Country Holdings Co. and Beijing North Star.

To read the whole Market Watch report click here. <p.

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