Chinese buyers unfazed by restrictions aimed at taming housing market

Prices rose 9.7% in 70 Chinese cities

TRD New York /
Jul.July 13, 2017 05:35 PM

Beijing (Credit: Nikolaj Potanin via Flickr)

“It’s the crazy thing about people. The more you say no, the more they want in on something.”

When Christian Bale’s character in “American Hustle” said this he wasn’t talking about China’s housing market — but he could’ve been. As the Chinese government tries to tame a frenzy of home purchases — through a series of policies, such as by raising mortgage rates, limiting apartment ownership and upping down payments required on second homes — droves of speculative buyers continue to scoop up apartments.

The result is rapidly climbing prices and extensive borrowing, the Wall Street Journal reported. Prices in 70 Chinese cities rose 9.7 percent in May from the same time last year. Officials are concerned that the property bubble could set off a series of foreclosures once it bursts. At the same time, they don’t want to go too far in slowing investments.

“Lessons from Japan and the U.S. told us that there is no such thing as an ever-rising market,” Li Xunlei, chief economist at Chinese brokerage Zhongtai Securities, told the Journal.

Still, China isn’t quite in the same place as the U.S. was in the lead up to the financial crisis about a decade ago. Banks in China don’t offer risky mortgages and are limited in their abilities sell off loans as securities. Buyers are also confident that the government won’t allow the market to collapse.

According to Moody’s, real estate accounted for 68.8 percent of China’s household assets at the end of 2016. [WSJ] — Kathryn Brenzel 


Related Articles

arrow_forward_ios
Zillow CEO Rich Barton (Credit: iStock)

Zillow and Opendoor aren’t making much on home-flipping

This week, the State Department of Taxation and Finance issued a new memo that notably made no mention of condos. (Credit: iStock)

Regulators quietly change stance on condos in LLC law

Realogy CEO Ryan Schneider (Credit: iStock)

Realogy’s plan to stop the iBuyers from gaining a foothold in Chicago

Daily Digest Thursday

Worker killed at Lam Group construction site, Uber signs WTC lease: Daily digest

Developers are offering to pay the increased mansion and transfer taxes to give them an edge in a difficult market. (Credit: iStock)

Amid slow sales, developers give buyers a break on mansion taxes

Triplemint’s David Walker and John Scipione with Hoboken, New Jersey (Credit: iStock)

Triplemint expands to New Jersey

Brokerage firms are strategizing ways to make up losses after the cost of application fees was capped at $20. (Credit: iStock)

Brokerages on rental application fee cap: “It hurts”

Alex Rodriguez (Photos by Guerin Blask)

A-Rod is coming for NYC and SoFla real estate

arrow_forward_ios