Devaluation Will Cause Home Prices to Decline

Another article claiming a weaken yuan is bad news for housing is out. Chinese home prices will be much lower for U.S. dollar holders, whatever happens to the nominal price.

iFeng: 人民币贬值只会小幅利空楼市 不会压垮房价
Medium and long term effects, a moderate depreciation of the yuan against the dollar will help boost exports, thus contributing to steady economic growth, after the economy stronger, naturally good stock and property markets. In the short term, the recent sudden depreciation of the domestic and international capital markets triggered panic inevitably impact the stock market, property market and affect people's psychological expectations.

Of course, in the short perspective, there are three points on the market small negative. First, a small amount of foreign capital may flow out from the domestic property market. Second, the cost of holding dollar debt financing will increase the developer. Third, a small amount of money to foreign buyers or domestic development initiative will be improved. However, these three factors is very limited.

Overall, the devaluation did slightly bearish property market in China, but the impact is small, does not cause the second half, and even long-term property market downturn, less likely to overwhelm rates.

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