Predictable: Shenzhen Home Prices Soar

Back on Feb 5 I posted: Inflation Coming? China Reverses Deleveraging Effort Amid Coronavirus Outbreak
China will help companies amid the ongoing shutdown related to the coronavirus outbreak. Many of these policies are a reversal of deleveraging efforts made in the past year or two. They are loosening lending and reversing the crackdown on underpayment of social security. The social security taxes will be repaid later, but how many businesses will take the opportunity to load up on credit?
Betting on Chinese companies gaming the system is the closest thing to a sure bet and sure enough, they did it. Cash poured in Shenzhen housing.

Caixin: Business Relief Loans May Have Flowed Into Shenzhen Property Market
A recent usual surge of housing prices in China’s southern city Shenzhen raised red flags for regulators who started a probe into whether relief loans to small and micro businesses amid the Covid-19 pandemic flowed into the property market.

Shenzhen’s housing price rally has been leading tier-1 cities in China since March. New condo prices rose by 0.5% in March from the previous month, and existing condo prices grew by 1.6% on a monthly basis, three times the national average among the biggest cities, data from the National Bureau of Statistics shows. Price growth effectively stalled in February because there were hardly any housing sales as people stayed home.

Now the Shenzhen property market has a relatively high leverage rate, mostly because small businesses use their current properties as collateral to get cheap loans and invest in the housing market, according to a senior executive at the Shenzhen office of real estate brokerage Lianjia.
Chinese article at iFeng has more details: 央行动手彻查!李迅雷:实体没戏,都去玩虚的

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