Categorized | International

Chinese Government Vows to Maintain Property Restrictions

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China’s government has declared that it has no intentions to ease up on property restriction policies that have been put in place to slow down the growth of the nation’s real estate market. The news of the announcement caused bank and developer stocks in Hong Kong to experience significant drops.

There was some hope last week that the Chinese government would ease up on its policies after prices had started to cool over the last few months. Those hopes had caused stocks to rise last week, as investors believed that China was once again looking to improve the outlook of its economic growth.

However, government officials have now made it clear that the policies will remain in effect until long-term results of the policies can be seen and analyzed. Even the largest and most powerful developers and lenders saw their stocks take significant hits with the news.

China’s property policies have long been the talk of the global real estate market, as they have put developers in the nation in a serious bind. While real estate prices are no long soaring through the roof, there are many questions as to how beneficial the restrictive policies will be in the long run. Both developers and lenders have lost significant profits, and are now struggling to stay afloat.

While the policies were put into place to prevent a housing bubble from forming and eventually bursting, they have, in actuality, caused a sizeable portion of their economy to come crashing down. Most analysts are not surprised by the news that the policies will continue, as they have seemingly worked well in terms of limiting price increases. However, they may have also cost a good number of jobs, as developers suffer the consequences.

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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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