Controlling home price increases in China's capital Beijing and financial hub Shanghai is critical for cooling the country's broader property market, according to Wang Shi, chairman of Vanke, the mainland's largest real estate developer.
"My concern is that if the price increases in those two cities can't be controlled, it will result in price increases in other cities as well and that won't be a good thing," Wang told CNBC on the sidelines of the China Entrepreneur Club's Annual Summit of Green Companies in Kunming, which is located in the country's southwestern Yunnan province.
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Property prices in Beijing and Shanghai have surged over the past decade driving the average home buyer out of the market. New home prices in the two cities rose 8.6 percent and 6.4 percent, respectively, in March from a year earlier.
Last month, China's central government unveiled policies to curb speculative demand and stabilize prices nationwide. It called for stricter enforcement of a 20 percent capital gains tax on home sale profits and asked cities with fast property price increases to raise the down payment requirement and mortgage rates on second homes.
However, Wang who believes the country's property market is in a bubble state, said he is unsure whether Beijing's efforts to control prices will be effective.