Housing prices in much of Asia are soaring thanks to strong economic growth and surging demand from wealthier families who want to upgrade their homes.  China in particular is witnessing a rapid expansion in its property market. But as VOA's Naomi Martig reports from Hong Kong, rising prices are pushing some people out of the market, and Chinese authorities are concerned a property bubble could develop.

China's is the hottest among Asia's property markets.  The World Bank predicts that from now to 2015, half the world's construction will take place in China.  Hing Yin Lee, the director of research and consultancy at Colliers International in Shanghai, says property prices have been steadily rising in recent years, particularly in bigger cities such as Shanghai.

"This year you can see that on average, the property prices has risen by about 10 percent compared with one year ago," he noted.

Just a decade ago, the Chinese government owned all land, and individuals could not take out loans.  Housing reforms in the late 1990s and an export boom that flooded the economy with cash have since then fueled strong real estate growth.

Terence Chong, an economics professor at the Chinese University of Hong Kong, says one reason why so many people want to invest in Chinese real estate is because of its attractive appreciation rate.

"So people from the mainland China, from Hong Kong and other countries, they just buy a property in China in order to gain the appreciation in the Chinese currency.  So they think it's a good investment," he explained.

Lee says that right now, the increase in property prices is healthy, because it boosts consumption and investment.  But he says, if a property bubble forms, and bursts, it could affect the entire Chinese economy.

"Not only in property market itself, but spread to other sectors of the economy, particularly the financial system," he added.

The price of housing in China rose a record 9.5 percent in October.  Earlier this month, Chinese Premier Wen Jiabao cautioned that tighter controls are needed to cool the market.

There are measures in place that make it more difficult for individuals to own more than one property, such as higher interest rates on loans and larger down payments.  Government regulations are also limiting foreign investment in China's real estate market, and lenders have been warned to examine borrowers closely to avoid defaults. 

Lee and other analysts say that while it is difficult to control the property growth rate, they are hopeful such measures will help regulate housing prices and prevent a financial crisis.