How to Break the Housing Bubble? Let the RMB Float

How can China burst the housing bubble? Some choices are examined, with a free-floating yuan considered the most lethal kill shot, followed by rising interest rates and a stall in credit growth.

iFeng: 如何摧毁高房价? 真正有用的是这几招
1, the yuan freely convertible

Lethality: ★★★★★★★

If the yuan fully realize the significance of freely convertible, which is open all restrictions on capital account, the Chinese property market, the stock market will collapse rapidly. The things you want to know with the toes will be able to: deep north central area of ​​a 150-square-meter high-rise residential, you can go to the city to buy the most expensive US home prices better "house", that is, we are talking about single-family house. If you go to the middle of the small city state, or even to buy 10 sets of luxury "house", or buy a large low-income class living "house" neighborhoods.

Not to mention the stock market, stock prices look Comparative "A + H" shares will know. Therefore, the RMB at this stage, it is absolutely impossible to freely convertible. After Golden Week, foreign exchange management will be strengthened, never relax.

2, rising interest rates

Lethality: ★★★★★

Rate cities financial attributes more and more obvious, so more and more sensitive to interest rates. Current commercial mortgage rates at historic lows, fund loan interest rates so basically, this is the real estate "policy Bull," the fundamental cause of the current. But from a global perspective, the major countries are in the era of low interest rates, even if the interest rates in the United States, interest rates are still low.

Since China's real economic downturn, it is difficult to change the low interest rate environment in the short term. If interest rates rise trend occurs, then there must be a house prices fall.

3, M2 stall

Lethality: ★★★★★

M2 broad money is short, and its year on year growth can be understood as the central bank issuing speed. Early reform and opening up, M2 growth rate was close to 300% GDP growth, then gradually down to 200%. From historical data, while M2 growth rate down to around 150% GDP growth, often there will be shortage of money, leading to soaring interest rates. China's "printing speed (M2 growth)," Why must exceed the "wealth growth rate (GDP growth)"? I have repeatedly said in the column, this is because investors are local governments and state-owned enterprises, inefficient problem is difficult to avoid.

The current GDP growth rate of around 6.5% to 6.7%, if less than 12% long-term growth rate of M2, or even less than 11%, interest rates will rise, prices will be suppressed. If the M2 growth rate soared to more than 14% or even 15%, then prices will rise sharply.

4, Raise Down Payment

Lethality: ★★★★

Commercial loans, LTV (especially the former) fund loans, in fact, buyers leverage. Down into several lower (LTV is higher), the higher the leverage, the more help to stimulate the housing; on the contrary, the higher the down payment into several (LTV is lower), the lower the leverage, the more It helps suppress prices.

If you cancel the real estate mortgage, you can only buy the full amount, then this trick of mass destruction will be more than raise interest rates. Golden Week this round of the New Deal years, many cities have introduced a number of initiatives to raise the down payment, but limited efforts.

5, Raise Taxes

Lethality: ★★★★

Tax increases on the property market hit, also vary. Such as Hong Kong's "two strokes hot," really take control of prices; Vancouver heavy taxes, but also subdued the rebellious rates. The reason I give four stars because the mainland Chinese cities in the use of tax instruments, the general are more gentle. Only Shenzhen through twice a year to assess the price increase of the way, the second-hand housing transactions deed increased by 1 times more.

In addition, the government can levy property taxes, vacant tax, imposed strict housing transfer tax and other ways to control prices. Overall, the vast majority of the current property market in the mainland cities of tax cuts instead of tax increases.

6, Increase the supply of land

Lethality: ★★★★

How can I make "bread" price? Of course, is to increase the "flour" supply, while breaking the monopoly of the bakery. Currently in the field of real estate, no monopoly on the supply of housing developers any city. Therefore, the best way to stabilize the property market, is to increase the supply of residential land.

Unfortunately, hot city generally adopted a starvation diet, residential land supply less than normal, and some are even very small. In this case, how can housing prices do not rise?

7, Restrict Purchases

Lethality: ★★★

Vary the intensity of the restriction, in general influence than the previous several measures. For the moment, Beijing, Shanghai restriction greatest efforts, Shenzhen, Guangzhou followed. Second-tier cities are hot recovery restriction, but the intensity is not strong. In most cities, but also does not allow foreigners to pay social security situation, buy a house.

Strict strict restriction policy, the key depends on local hukou capacity is not readily available. For example, to get Beijing accounts than Shenzhen accounts difficult to get several times more, then Beijing's restriction efforts will certainly be significantly more than in Shenzhen.

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