Categorized | International

China Housing Prices Remain Stagnant

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It appears that the regulations and restrictions imposed on the residential real estate market by China’s government are starting to have a significant impact. On average, residential property prices remained relatively stagnant in the last monthly report to be released.

When crunching the numbers, it appears that new homes increased in price in twenty-four Chinese cities, and decreased in seventeen cities. Prices of residential real estate properties remained flat in China’s biggest cities, including Beijing and Shanghai.

Analysts believe that prices will begin to fall in the coming months, which will then indicate that China has avoided any kind of housing bubble. The Chinese government began to strictly regulate the residential real estate market earlier this year in order to avoid the growth of a housing bubble. Many critics believed that the Chinese housing market was, at the time, becoming unaffordable for the majority of the nation’s citizens.

In response to the criticism, the Chinese government unleashed various housing policies aimed at limiting home purchases, and tightening credit. The majority of the major banks in China continue to increase their mortgage loan interest rates, so as to remain inline with government policy.

Some analysts worry that the Chinese government may have gone too far with the housing restrictions, and that tightened lending may bring the economy to a halt. They fear that, as housing prices begin to drop in the coming months, the economy will be sent into a tailspin, essentially causing any and all government restrictions to backfire.

The Chinese government, however, is pleased with the results of its housing measures thus far, and believes that a bubble may very well have been averted.

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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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