Categorized | Featured, International

Struggling Chinese Property Market Having Greater Than Expected Impact

Struggling Chinese Property Market Having Greater Than Expected Impact
Please Share!

Restrictions imposed by the Chinese government are likely to negatively impact the nation’s economy more than originally anticipated. The restrictions were initially imposed to prevent a housing crash that would cripple the economy. However, the preventative measures have, in many circumstances, created the same problems that they were intended to avoid.

The restrictions are expected to cause a two percent drop in the overall economy in 2012, as housing prices continue to drop. Some analysts believe that the nation could see a ten to twenty percent decrease in housing prices over the next year.

Property developers are hoping that the Chinese government decides to loosen their restrictions based upon the most recent expectations. They have struggled the most of any sector in the past year.

Although the Chinese investment interest is greater than it was in the United States just prior to the crash, there are some distinct differences. It is widely believed that the United States had an oversupply of housing prior to its crash. China, on the other hand, has not had the same issue. In fact, there is enough demand for the country to build another seven million housing units in the next year.

Even with the new construction planned, the nation’s economy is expected to see a two to three percent drop in growth. If the housing market continues to drop, that decline could be even worse. It has yet to be seen as to whether or not the Chinese government will consider loosening the current housing restrictions, though most analysts are not overly optimistic.

Please Share!

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.

Leave a Reply

Twitter Chat