House trap

11 October 2016 By Kathy Gao

China’s property market has kidnapped the economy. Municipalities are trying to cool overheated investment, and the central government is signalling concern, but it lacks good options. More curbs might calm prices, but at the risk of derailing economic recovery.

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Context News

Over 20 Chinese cities have announced housing policy changes since the end of September, many targeted at increasing mortgage downpayment requirements or excluding speculators from market entry.

China's central bank head Zhou Xiaochuan, speaking at a G20 meeting in Washington, said the Chinese government is "paying close attention" to rising property prices in some cities and will take appropriate measures to promote the real estate market's "healthy development".

China's CSI300 property index fell as much as 5 percent on Oct. 10 before recovering by midday (GMT 0400) on Oct. 11.

Household loans, mostly mortgages, accounted for 71 percent of total new bank loans in August, though they were down from more than 90 percent in July, official data showed.

Subjects

Regions

China's frothy new home prices look vulnerable

Context News

Over 20 Chinese cities have announced housing policy changes since the end of September, many targeted at increasing mortgage downpayment requirements or excluding speculators from market entry.

China's CSI300 property index fell as much as 5 percent on Oct. 10 before recovering by midday (GMT 0400) on Oct. 11.

Household loans, mostly mortgages, accounted for 71 percent of total new bank loans in August, though they were down from more than 90 percent in July, official data showed.

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