Categorized | International

Fears Grow Regarding the Performance of China’s Property Market

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Analysts around the world continue to feel uneasy with respect to the consequences that may be experienced from China’s governmental property restrictions. The policies put into effect by the Chinese government have caused a decline in the nation’s real estate market. The decline has caused many developers, both small and large, to face struggles that may prove to be insurmountable. Many fear that the struggles may not only impact the real estate industry, but also the lending industry as a whole.

China’s government has stood firmly by their imposed restrictions, even as reports continue to show property values dropped across the nation. As such, many potential homebuyers have opted not to buy a home in the current market, thus increasing inventory for many developers. As the inventory and debts of developers continue to rise, some analysts believe that there may soon be a massive sell-off of properties. Such an action would cause a further, and more detrimental drop in residential real estate property values.

There is a shared belief among real estate analysts in China that the nation’s property market would likely experience sharp declines in pricing over the next year unless there is a significant change in policy.

The restrictions imposed by the government on the property market were intended to control rising prices and to prevent the growth of a property market bubble. However, many analysts now wonder if the actions did more harm than good. The purpose of the housing restrictions was to prevent acute decreases in pricing while also controlling overall growth. While the Chinese government has been able to slow down growth, the most recent trends indicate that their policies will cause significant declines as well.

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About Josh Johnson

Josh is the main writer for the Residential category. He also helps out on other categories when needed, mainly the International section.

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