Chinese authorities have introduced 房屋貸款 restrictions in a bid to ease concerns across the mounting housing bubble in China’s largest cities
On March 17, Beijing and three other major Chinese cities introduced a new round of lending curbs in an effort to suppress the overheating property market in China’s largest cities.
In the initial two months of 2017, the complete investment in real estate development was RMB985.4bn ($142.9bn), up 8.9 percent year-on-year. For the same period, sales of residential buildings were up 22.7 percent, according to official data.
Price hikes are particularly pronounced in large cities where land for new developments is now increasingly scarce. For instance, the Tier 1 cities of Beijing, Shanghai, Shenzhen and Guangzhou, have experienced markedly greater price rises compared to those of other regions. In reality, estimates suggest it could take several years to operate off existing housing inventories in a few of China’s smaller cities.
China’s new housing policies would be the latest in a number of other tightening measures employed across the nation over recent months
Beijing’s new measures include steeper requirements on down payments for buyers of your second home, that happen to be up from 50 to 60 %. Furthermore, many people will be classed as ‘buyers of any second home’, where previously those that had already paid off a home loan might have been classed as very first time buyers. Similar measures were utilized in the provincial cities of Guangzhou, Shijiagzhuang, Changsha and Zhengzhou. The brand new policies would be the latest in several other tightening measures employed across the nation over recent months.
Just four days following the new measures were announced, the OECD released its annual report about the Chinese economy, advising that authorities “urgently” address the overheating property market. The report stated: “Soaring property prices in Tier 1 cities and leveraged investment in asset markets magnify vulnerabilities and the potential risk of disorderly defaults.”
It further warned a collapse in housing prices would hurt several important sectors, including real estate property, construction, refurbishment and home appliances. This said, the report conceded the impact of the a real estate market collapse may be mitigated by stringent prudential regulations, and also the financial sector could likely absorb the shock.
Yet, authorities must conduct a delicate balancing act. A housing bubble poses financial dangers and triggers frustration for 房貸, but more liquid monetary conditions also play a dexlpky77 role in supporting growth. The overheating housing market is also specific to a particular locations, prompting authorities to take into consideration differentiated policies all over the housing marketplace.
For example, Wang Zhaoxing, Deputy Director in the China Banking Regulatory Commission, said throughout a media briefing a week ago: “For third and fourth-tier cities with excessive pressure of reducing inventories, as well as for buyers with solid demand (people who migrated from rural areas to urban areas), favorable credit financing policies will be provided as being a support.”