Government Economist: Real Estate Adjustment Is A Good Thing

Fan Jianping, chief economist at the State Information Center, says the real estate adjustment (aka bubble bursting) is a good thing and the market won't crash for three reasions: unemployment is low, there is a lack of securitization in the market, and urbanization will keep demand strong. He sees prices growing more slowly off a higher base.

专家:房地产调整中国经济扛得住 三原因证明
Real estate issues and come to a crossroads. How to deal with inter-cooling of the real estate regulatory issues? How to deal with downside risks to growth?

Fan Jianping, chief economist of the State Information Center today's micro-Bo said that the real estate adjustment is a good thing, is to promote the real economy must upgrade the amount of investment into low growth in sales on the basis of the high base is not terrible or even negative growth in the short term, Chinese economic Can Go, one job Can Go, two securitization thus no financial Can Go, three residential urbanization just need the acceleration phase is still large, long-term negative growth in real estate will not be long-term, low growth will be high base the future of the new norm.

In addition, according to the Southern Metropolis Daily reported that the State Information Center Fan Jianping, chief economist at the State Council Information Office held a briefing said that the current real estate market, the biggest feature is to "divide" the country is no longer possible introduction of effective "few countries" regulate, a second-tier cities due to the inflow of labor force population, the possibility of falling house prices is unlikely.

For the present, some Chinese real estate "crash," saying, Fan Jianping considered "unprofessional." He said that at present the largest Chinese real estate market is characterized by regional differences, the future direction of differentiation, the main factors bring jobs inflow and outflow of the population of the workforce. For example, some jobs less flowing out of the labor force population, housing backlog will be a lot of pressure. But in recent years, a second-tier cities in the service of good new jobs, labor inflows significantly, the demand for real estate is still growing. "These urban real estate prices do not rise, and even fall, I think the likelihood is not great."

Fan Jianping suggested that we should change this situation through the development of urban agglomerations, such as the integrated development of Beijing, Tianjin and Beijing to put more jobs scattered around Beijing city, after a reasonable distribution of the population, to the first-tier cities housing prices rose problem solving.

"We can no longer possible to introduce a nationwide are effective against several of the country," said Fan Jianping, there may be more need for government regulation of real estate in various cities according to their own city, realistic introduction of relevant policies to local conditions. He suggested that local governments in addition to the past because of soaring prices forced taken purchase outside, limited credit policy cancellation, it is best not to introduce stimulus. "The market is given to the market, by the market regulator, than only the visible hand of government into it blind stir together the results will be much better."

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