An eastern China city recently flipped a policy that was supposed to place a damper on investors buying homes for flipping. The effect trickled down and has boosted shares in property developers. This also followed the notion that other cities will imitate the action, easing the weight slowing sales had on the economy, Reuters reported.
This policy became the first of its kind as the city government heeded government authorities' advice. The authorities have been moving around the country, taking steps to take control of house prices and bring them down to manageable levels. This was also announced by the central government media.
These policies were meant to help China's slow down ease up, even as new home price growth continued to be slow in cities like Heze in particular. There have been various risks, but the biggest so far had been smaller government allotments and tight financing. That the ongoing China-US trade war is making matters worse for the country hasn't help confidence at all as well.
The average house in China will continue to be affected by the price hikes, forecasts reported in Business Times have shown. A rise of 2 percent is seen for the first half of 2019, while 0.5 percent will be the norm for most of the year. This is what a survey given to 16 property analysts and economists have shown thus far.
Housing sales are seen plunging to an expected 5 percent in 2019, with property investment also following in a decline to 4 percent. This is bad since China's real estate market has a direct impact on over 40 industries. They can affect any number of industries already reeling from the costly trade war with the US, from steel to washing machines.
A few analysts at Hua Chuang Securities have echoed their opinion that the policy change would only introduce a partial measure. Its effect, however, had already been a good influence in hiking up sales. The analysts then added that, in the future, the policies could be amended to where it would again contribute greatly to China's economy.
Heze, a city of more than 8 million, made the move in accordance with the central government's policy to keep house flippers in check while giving first-time home buyers a chance. This is also in line with Chinese president Xi Jinping's vow to keep price growth in check.
