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Beijing to maintain restrictions on real estate market
Despite fears that the real estate bubble might burst, China’s deputy prime minister says restrictions will stay in place to “promote the healthy development” of the sector.
Beijing (AsiaNews/Agencies) – Asian markets are still jittery over China’s real estate sector. Despite fears that the bubble might burst, the Chinese government will maintain restrictions on the property market, Vice Premier Li Keqiang said.
Real estate sales and prices have been falling nationwide due to tough restrictions on purchases and bank lending, fuelling fears the market could collapse and send debt-laden property developers to the wall.
China’s property market was “in a key stage” and restrictions are needed to “promote the healthy development” of the sector, Li was quoted as saying. “We must maintain policies to prevent property prices from rising overly fast,” he added.
In the last year, China has introduced a range of measures aimed at bringing down property prices, such as bans on buying second homes in some cities, hiking minimum down payments for buyers and introducing property taxes.
Such steps however go against the surge in bank lending the government favoured in recent years.
Although designed to help Chinese banks weather global economic and financial shocks, greater liquidity for the banks has boosted lending and fuelled investment in the real estate sector. However, now many buildings stand empty.