Categorized | International

Analysts Predict Real Estate Policy Change in China

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While real estate prices across the country have fallen, and related commodity markets struggle as a result, the Chinese government has adamantly stood by their market restrictions. However, many analysts believe that China’s government will soon change their tune.

Analysts are predicting that the Chinese government will not sit back and watch real estate prices experience a freefall in the coming year. The government imposed restrictions this year that have prevented the purchase of a second home across the country. Mortgage rates have also increased, as has the down payment requirement. As such, prices in the major cities have either dropped or remained stagnant.

Many fear that prices will experience an even sharper decline in the next year. Such a decline would drastically impact economies across the globe, and will negatively influence China’s GDP numbers.

A drop in the nation’s GDP and overall economic growth could possibly impact China’s economy standing in the world, which is why many analysts believe that the government will ease restrictions if the drops continue. Changes in policy would not take place right away, however. The government is not expected to reduce their property market limitations until the end of 2012. By that time, property values may have decreased by as much as thirty percent.

Many nations are watching the Chinese real estate market closely. China imports commodities from as far away as Latin America. As such, any dramatic reduction in pricing could potentially cripple economies around the world. With that in mind, many foreign investors believe that policy changes will be made, and are planning investments accordingly.

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About Nancy Raven

Nancy is the main writer for the International section of the website. Sometimes she also helps Drew out on the Finance/Mortgage section as well.

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