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By Tu Lei (chinadaily.com.cn)
Updated: 2007-07-23 10:13

The housing sales prices increased 10.1 percent year on year in the first half of this year, said Yu Xiuqing, a spokeswoman from the Beijing Statistic Bureau, last week.

Special coverage: Housing in China  Related readings:  Guangzhou property prices hit new high in June  Beijing's new house prices rise 20% in June  Property price growth in May quickens; Up 6.4% on year  House prices surge along Beijing's No 5 subway line

The high prices are a result of the increased permanent population and hot money, said Yu.

Figures show that every year the permanent population in Beijing rises by about 300,000 to 400,000 people, with some of them being college graduates. The capital city's number of graduates in 2006 increased to 179,000 from 70,000 in 2001.

"Many of them choose to stay in Beijing," said Yu.

The upgrade of residents' consumption structure creates a strong demand for housing, and many people are eager to make money via buying and selling houses, which also shortens the supply of housing, said Yu.

Currently, the city government is working on safeguard measures, said Yu, adding the government will also supply an additional 20 million square meters of economically affordable houses and houses with limited housing prices and flooring area in three years.