Chinese Govt Tells Developers to Cut Prices, Will They Listen?

Central planning leads to never-ending and ever-growing unintended consequences. Last year, the goal was to spur sales by driving up demand, to support home prices. Recognizing demand is gone, now the government wants developers to slash prices to move inventory. But land sales fund local government spending......
In this regard, the majority of the people rejoice, many people said that major cities housing prices are too high, their own food or drink for decades can not buy on a house. The central government requires developers to lower prices, indicating that decision-makers have been fully aware of the people suffer room some time now.

...In particular note is the first-line and some second-tier cities housing prices climbing, the atmosphere is extremely strong speculative demand, causing housing supply situation. While the third and fourth tier cities due to the excessive investment in residential real estate a few years ago, resulting in overcapacity situation. A large number of real estate backlog of empty houses sold.

Therefore, China's real estate industry is also facing structural problems. Now the question is central to encourage real estate prices, housing prices will take the initiative to cut prices it? I think, perhaps in response to the call center developers to fine-tune Rate possibility moderately large, sharp decline in housing prices is the probability that does not exist.
Cutting to the punchline:
Central encourage developers to lower prices, does not mean that prices will plummet, more does not mean that the property market will quickly digest high inventories. Given the current relationship between the costs and profits, some developers will be decreased slightly, but he will not take the initiative to a substantial decline in house prices. So really want to drop prices must fall high land prices and taxes, but also to let the local government to get rid of dependence on the real estate industry. Otherwise, prices even fine-tune the impact of destocking is not large.
iFeng: 中央鼓励楼市降价 房地产商会听话吗?

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