Can Negative Deposit Rates Save Housing Market? Last 4 Episodes Saw Sharp Housing Rallies

This article is overall pessimistic on housing, but sees the latest episode of negative interest rates as the real estate market's "last hurrah."

In the long run, because the prices have been at a high level, and changes in demographic factors, China all city's real estate asset prices, future increases will slow down.

...The macro level, this year, the central bank cut interest rates three times RRR, currently one-year deposit interest rate has been reduced to 1.75%, while the latest data released by the National Bureau of Statistics show that because of fresh vegetables, pork prices rose sharply, August CPI rose 2.0% resident deposits negative real interest rates appear to re-enter our era of negative interest rates, China's real estate market since 2009, is facing the most relaxed environment.

..."Negative interest rate" refers to the one-year deposit interest rate below the national consumer price index (CPI) growth rate. A Huatai Securities research report shows that since the 1990s, China has experienced negative interest rates four times, in October 1992 - November 1995; November 2003 - March 2005; December 2006 - October 2008; February 2010 - March 2012.

According to the National Bureau of Statistics, during the four times of negative interest rates, real estate prices have shown a sharp rise, each rose between 12.8% and 60%.

This period of negative interest rates, will prices rally? Ouyang Jie, senior vice president of Metro Holdings believes that the current A-share is facing a severe adjustment, real estate as a hedge against inflation residents strongest categories of assets, it is expected to become the subject of the best era of negative interest rates to resist inflation.

iFeng: 第五次“负利率”时代:楼市最后的狂欢?

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