From TRD New York: Chinese home buyers are looking beyond major centers like Shanghai and Beijing as places to invest, which may dampen the government’s attempt to curtail spiraling home prices.
Chinese officials have introduced restrictions in recent months, which has slowed price gains in places like Beijing, Shanghai and Shenzhen, Bloomberg reported. But that hasn’t happened in smaller locations like Tangshan or Bengbu — a city in the province of Anhui. Both places had month-on-month gains for 2.2 percent in April. In the city of Jinghong, which is not closely followed by statistics bureaus, home prices jumped 26 percent in the year ending in March 2017, Bloomberg reported, citing data from website Ynhouse.com.
In order to slow down property prices, the Chinese government has focused on creating cooling measures for certain cities — rather than implementing national rules. Local governments have been left in charge of dealing with smaller housing markets.
“The current surge in sales in third- and fourth-tier cities is fueled largely by expectations of a future price rally, not by asset yields, and that’s exactly a sign of a bubble,” Zhao Yang, Hong Kong-based chief China economist at Nomura Holdings Inc., told Bloomberg. He added that the “biggest risk” is that a downturn in those smaller cities could result in a sudden slump in national sales.
The Chinese government is also stepping up its efforts to prevent locals from buying real estate abroad. The May issue of The Real Deal looked at the impact capital controls are having on New York City real estate. [Bloomberg] — Miriam Hall