China needs its local economies to do what couldn't be done nationally--that is, to reduce, or to completely eliminate, their reliance on the property market. Trusting it to fuel development and growth isn't in the country's best interests, right now, Business Times reported.
Areas are focusing on urbanization and developing their own processes, which is approved in an effort to spur growth and get away from over-reliance on the real estate market. This was seen on commentary at the Capital University of Economics and Business, with the additional analysis that China's economy remained dependent on a 'stable and healthy property market.'
An analyst was quoted as saying that property markets remained driven by 'reasonable price boosts.' Raw materials and items for the home remained one of the major concerns as well. There might be more things that remained needed to be done, but these stood out as some of the major concerns.
There had also been concerns that this created a bubble in real estate which could be taken advantage of by profiteers. Prices have become inflated, properties have become hard to come by, and authorities are trying to get it contained. While the growth of real estate prices has created a good effect, there's still the danger that it could create something else like inflation.
Financial Times reported that the property market is instilling false confidence in people. Instead of real investments, they hinge more on speculation rather than going against financial risk. The result is a property market that's become more speculative, having no other income and influx of investments to rely on.
The solution is easy--to reduce increasing reliance on the property market for most people. In the big cities, there have been instances of prices rising too quickly for people to properly adjust to.
The rate of increase had actually slowed down, getting weaker amidst growth in the smaller cities. Home sales have also become weak and purchases of land hadn't been that great to suggest anything but a very 'dim' outlook for the housing sector.
The news is bleak, but China is trying to create a market that will react positively. Only last week, the city of Henyang introduced policies meant to create an easier time for the citizens to adjust to the price bubble recently created.
