China's?urban housing prices rose in November by the most in 16 months as buyer sentiment remained strong despite soaring costs, a surefire indicator of an upbeat economy.

Housing prices in 70 major cities jumped 5.7 percent last month from a year ago, the National Bureau of Statistics said yesterday on its Website.

The November lift was the sixth in a row since June, when property prices in the 70 cities started to register growth after six straight months of decline, according to the National Development and Reform Commission, the country's top economic planner.

On a month-to-month basis, property prices in November advanced 1.2 percent nationwide, the ninth consecutive gain.

The growth of property sales by value further accelerated to 92 percent in the first 11 months from a 79 percent gain in the first 10 months, the statistics bureau said.

Real estate investment in China during the 11-month period rose 17.8 percent, up from an increase of 16.6 percent in the first 10 months.

In Shanghai, property prices rose 5.5 percent from a year earlier last month, and on a month-on-month basis, a 1.1 percent gain was recorded.

"This year's property boom was initiated by first-time home buyers and other end-users who want to upgrade their living conditions," said Jenny Wu, head of the residential sector for east China operations at real estate services provider DTZ.

"Later in the year, investors have emerged as a major force in the buying spree, particularly in high-end sectors."

According to research results released yesterday by DTZ, the average sale price in the city's most luxurious residential properties has soared above 50,000 yuan (US$7,324) per square meter in Shanghai this year from about 7,000 yuan per square meter seven years ago.

Sales by value of high-end properties within the city's Inner Ring Road more than doubled in the first nine months of this year, with the average price surging to 37,000 yuan per square meter from 24,000 yuan at the beginning of this year.

'Hot money'

Among buyers of high-end properties, those from overseas and other provinces of the country accounted for a combined 55 to 70 percent, according to DTZ.

Demand for properties has remained robust across the country as inflation expectations, coupled with a possible inflow of so-called "hot money" from overseas, has spurred real estate activity since the second quarter of this year, industry analysts said.

Hot money refers to the cash spent by firms and individuals for short-term gains.

China relaxed monetary policy this year in an effort to boost economic growth, creating a tide of liquidity.

Banks issued a record 8.92 trillion yuan in new yuan-backed credit in the first 10 months of 2009, an increase of 5.26 trillion yuan from the same period a year ago.

Soaring home prices have reduced buyers' accessibility rapidly while worries over asset price bubbles intensify.

In its latest move to curb rampant speculation, the State Council, the nation's Cabinet, on Wednesday reintroduced the 5.55 percent business tax for people who sell homes less than five years after purchase.

The business tax was scrapped last year as an economic stimulus measure.

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