BEIJING - China’s housing market is expected to slow this year with sales forecast to drop, as Beijing steps up efforts to scrutinize banks and provincial governments to keep a lid on lending and prices, a Reuters poll showed.
But rapidly-growing household debt and ever-rising home prices have deepened fears about a sudden market correction and concerns over housing affordability. Property prices rose for the 51st straight month in July despite a series of government measures to crack down on speculative buying since early 2016.
“Housing measures in some cities will be tightened to avoid liquidity to divert into investments in properties. This will continue into the first half in 2020,” said Iris Pang, Hong Kong-based Greater China economist at ING Wholesale Banking. But few analysts believe prices will fall sharply. A lack of investment options, strong underlying demand for housing, an implicit state guarantee to prevent price falls and the relaxation of home purchase restrictions in some cities will all likely support prices, although sales are still expected to contract by 2% in 2019.
The property sector held up as one of the few bright spots in the slowing economy, although easing momentum in some markets took immediate pressure off regulators to unleash major new curbs to deter speculation.
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