Categorized | International

China’s Housing Market Health Depends on Public Housing

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With its housing market in complete disarray, and fears of an economic crash growing, China has placed its hope on a massive public housing initiative. The nation has embarked upon the construction of roughly thirty-six million subsidized apartments that will serve as housing for many of its low-wage workers.

The Chinese government has hopes that the project will provide a boost to industries that have been negatively impacted by restrictions placed on the housing market. Many construction companies and property development companies have been in a state of freefall for the past six months, as falling prices and buying restrictions have all but eliminated prospective business opportunities. For those companies, the public housing project will provide much needed revenue so as to enable the companies to stay afloat during the current hard times.

Analysts believe that the social housing project will be used to drive economic growth, thus preventing any kind of crash from taking place. In addition, the project will help to guarantee social stability, and help to control residential real estate prices. They also believe that the government is using these subsidized apartments as a means of controlling issues of social unrest in the country.

China’s economy has fallen significantly in the past few months. While the property restrictions have had the desired impact of reducing housing prices across the nation, it has unexpectedly hurt other areas of the economy. As such, consumer confidence has fallen, and analysts worry that economic performance will continue to decline throughout 2012.

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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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