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China Researcher Sees Downside Risks In Property

SHANGHAI: There are downside risks for the China property market in the second quarter because of the tightening measures that have been reintroduced to some cities, a Chinese government researcher said.

The curbs in first-tier cities are limiting property sales’ growth, Zhang Changcai, deputy director general at the Information Research Department of the State Council, said at a conference in Beijing Saturday.

Chinese authorities are seeking to stimulate the economy without fueling bubbles in the property market.

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Home sales in Shanghai, China’s financial hub, tumbled 60% in the week after the municipal government on March 25 unveiled a package of curbs, including stricter approval criteria for non-resident homebuyers and higher down-payment requirements for second homes.

The second quarter will be a challenging period for developers because of the tightening in Shanghai and Shenzhen, as well as declining sales in second-tier markets, industry consultant E-House Co-president Ding Zuyu said in Shanghai on Friday.

The Financial Society of Shenzhen Special Economic Zone, a research unit under the local branch of the People’s Bank of China, last month asked commercial banks in the city to strengthen risk-control practices on household mortgage loans as property prices have soared, according to a statement obtained by Bloomberg News.

While the foundation for economic recovery is “still not solid,” it’s possible for China to achieve an annual growth rate higher than 6.5% this year, Zhang said.

–THE STAR ONLINE

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