China property —
“A place to live in,” is how China’s president
Xi Jinping described residential property at the
recent party congress.
It wasn’t the first time he
had said as much, so with such a clear tone from
the top, it is no surprise that China has been
tightening controls on real estate speculation for
over a year now.
As a result, the growth of
property sales turned negative late last year while
property prices softened in many cities. Expect
2018 to be the year when these controls really
bite, not just on the property market but on
overall consumption that has been propped up by
the property wealth effect.
Zhiwei Zhang For instance, provincial officials in all
tier-one cities and many tier-two cities have
restricted purchases of second and third homes.
In addition, other tier-two cities have increased
down payment requirements for second homes.
The controls have even extended to first
purchases. Last April, two days after China
declared it would build a new special economic
zone on a piece of rural land in Xiong’an, roughly
80 miles south of Beijing, the government banned
housing sales in the region.