Categorized | International

China’s Government Stands By Restrictions

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The restrictions imposed by the Chinese government on the housing market have started to negatively impact the bottom line of many industries related to housing sales and development. Despite the negative reports, the government continues to stand by its policies, and is not looking to loosen up the restrictions any time soon.

The government has reemphasized the importance of equally providing housing for families with low incomes. However, such policy has created an environment in which new home sales are dropping exponentially. With the massive decline in sales, developers are putting projects on hold, and are struggling to pay builders for the most recent projects.

Construction companies have been directly impacted by the government’s policies, as the number of residential housing construction jobs has dropped nationwide. Furthermore, companies specializing in raw materials used for building homes have also seen some serious setbacks.

Real estate and financial analysts in China believe that housing prices will likely drop another ten percent across the nation in the next twelve months, with some cities facing harsher declines than others.

While the property restrictions were intended to prevent the formation of a housing bubble that could essentially cripple China’s economy, they have, in their own right, created a small bubble of sorts that has now burst. Real estate agencies, developers, and construction companies are all hoping that the government will reverse its current policies far sooner than twelve months.

It is not clear as to how many companies will go under as a result of the policies. However, what is certain is that many are choosing to at least temporarily halt or slow down the operation of business.

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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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