Cities Tighten Housing Rules More Than 70 Times in July, 260 Times This Year

Analysts differ on the end of this tightening cycle. Some see the end in sight as price declines mark the bottom, while others think this could be a much longer downturn. All may depend on if China successfully quarantines real estate from a rise in lending, something it has never completely succeeded doing in the past even when credit was in a downturn. At the same time, it must also ensure that credit flows into the private economy and SMEs, something it has failed to do for the past 6 years.

iFeng: 7个月260次 中国楼市进入“调控年”
Yang Hongxu believes that the cities in which these second-hand housing prices have fallen have basically entered the downward cycle of the market. He further stressed that this down cycle may be longer. “The main reason is that this up cycle is relatively long. It used to be one and a half to two years. This time, it has been going up for three years since May 2015. The past down is generally about one year, and this time it is estimated to be long. To 2 years or even 3 years." Yang Hongxu analysis.

Talking about the degree of downside, Yang Hongxu believes that from the perspective of housing prices, different cities will be different. In the past, hot cities with large housing prices may fall by about 15%, and some areas such as the Beijing area have already fallen by 40%.

Gu Yunchang, deputy director of the Housing Policy Expert Committee of the Ministry of Housing and Construction, holds different views on this. He believes that when house prices fall, it indicates that the down cycle has basically reached the bottom. He further pointed out that the second half of this year to the first half of next year will be the low period of the property market.

Gu Yunchang said that real estate has obvious cyclicality. First- and second-tier cities and third- and fourth-tier cities have a rotating effect. At present, the third- and fourth-tier cities have experienced a wave of upswing. The first- and second-tier cities may experience a rebound after this round of cooling.

Gu Yunchang further pointed out that in the current domestic and international environmental background, fiscal policy and monetary policy have been adjusted, and it is necessary to avoid the release of liquidity of funds to further stimulate the property market. At the same time, before the long-term mechanism of real estate has yet to be established, administrative measures will not relax the regulation of the property market.

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