BEIJING, Nov. 4, 2009 (Xinhua News Agency) -- Housing prices in major Chinese cities have soared remarkably since the year's beginning, fuelling concerns over possible asset bubbles.

China's current property prices are a little high, said Deng Tishun, chief strategist at Goldman Sachs (NYSE:GS) China, but no bubbles have yet formed.

In the absolute terms, average housing prices in China's first-tier cities still stay at the low-end of the global level, said Deng. But in terms of affordability, the prices are slightly high, he added. The current housing prices seemed to have absorbed future income growth.

Statistics from Goldman Sachs show that over the past six years, the pace of housing price hikes has outpaced income rises by 30 percentage points in Shanghai and 80 percentage points in Beijing.

Despite that, Deng believed that real estate valuation is not too high compared with other assets, especially stock market securities.

During China's urbanization process, housing demand will remain robust. If housing prices fall sharply, the purchasing power of the potential buyers will be unleashed, and in turn add support to housing prices, he said.

On the aforesaid grounds, Deng believed China's housing prices won't recede in the short term.

It is possible that income growth will catch up with that of housing prices so that more people on the streets can afford a home, which would be ideal for the real estate industry and long-term economic development, he said.

While housing prices in the long run are related to income growth, they are affected within the short term by many factors including monetary policy, the local government's stance on land supply, tax policies, and mortgage rates.

A loose monetary policy will lead to excessive liquidity and push up expectations for inflation, driving housing prices up.

"If the loose monetary policy is sustained for too long, the possibility for a real estate asset bubble cannot be negated," he said.