Govts Will Not Allow Home Prices to Fall, Oppose Developer Price Cuts

Over the past ten years, the local economy has long been inseparable from real estate, the pillar of industry, the future is difficult to fundamentally change. This is an inextricable knot.

"In the local county or city level, real estate is still without question the pillar of industry, which is why the central government regulation and control, the root of where they are difficult to actively cooperate." Sichuan deputy mayor who requested anonymity told the "China Times" reporter He said that the economic development of backward areas, no major industrial projects, only rely on real estate to promote economic development.

Based on this, real estate has become a major source of local government revenue, and in some places even become the "only" source. Data show that in 2015 local real estate sales were 12.8495 million square meters, sales of 8.7281 trillion yuan, the government took 73%; of which, real estate development land supply needed to become a major part of the local finance. The reporter saw a number of local officials in the opinion, for real estate, no matter how the regulation of central and local governments always have their own calculations.

"Leave real estate, every business will be hit." The deputy mayor said that the leading role of the real estate can not be underestimated, can promote the development of almost all sectors.

...In addition, it is undeniable that, in China, living in the house is an ideal investment good. With low bank interest, stock market and other risky factors pushed down, a house has become the most stable and appreciating of investment goods.

"From the inception of commercial housing, it can be said that the market price all the way to triumph, even if there is a period of decline in house prices, it is short-lived." A real estate speculators who said that the house superior ability to add value, like stimulants exciting . Many people have already bought houses enjoy the benefits brought about by the appreciation of the great house, and then again and again to buy a house constantly.
Cities rely on real estate development to grow the economy. Without it economic growth collapses. Households rely on housing as an investment with little to no alternatives. Home price declines are temporary and will be opposed by government, so buy buy buy!
"Prices can rise, can stabilize, but cannot fall." A Beijing-based developer told the "China Times" reporter: "Developers want to lower prices, but what they say does not count," the predicament: "prices will not drop, every stakeholder who benefits will not allow this, even if the developers wants to lower prices sometimes the local governments have opposed them. Although the local government will not issue a policy against lowering prices, the pressure is obvious."

iFeng: 地方财政患房地产依赖症 降价有时政府反对

1 comment:

  1. I've recently just bought my first house in Changzhou,China. I believe that the prices in Tier-1 cities should continue to increase. However, I'm not sure about the Tier-3 cities, prices seem to be flat.