Home Business Chinese official media said that housing prices fell too fast may affect financial stability | Morning Post

Chinese official media said that housing prices fell too fast may affect financial stability | Morning Post

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The Economic Daily under the State Council of China issued a comment today and pointed out that to promote the healthy development of the real estate market, stability is the main keynote. A big increase is not stable, and a big drop is not stable. A too fast drop in housing prices may affect financial stability, and it is necessary to curb the real estate bubble. , And we must guard against big ups and downs.

The article entitled “Beware of the ups and downs of the real estate market” stated that for some time, while housing prices in many cities have risen too fast, some third- and fourth-tier cities and counties have experienced a strong downward impulse due to excessive housing supply. The more direct reason is that the real estate companies are under increasing pressure to withdraw funds, hoping to return the funds as soon as possible through discounts and promotions.

The article believes that people are increasingly aware of the financial risks caused by the rapid rise of housing prices in hot cities. It should also be noted that if housing prices fall too quickly in other cities, it will also bring great risks to the property market. “The price of one real estate is reduced, and the prices of others are also reduced, causing mutual’stomping’; some speculators defaulting on the contract may affect financial stability.”

The article stated that, in order to avoid vicious competition and drastically low-price sales behaviors of real estate companies, the introduction of measures to limit declines does not mean that house prices cannot be lowered. It is normal for house prices to rise and fall within a certain range. The key is to prevent some markets from falling too fast and sharply. Stability is the ideal state of the real estate market. The real estate market must not only suppress the real estate bubble, but also prevent big ups and downs.

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According to Reuters, many places in China have taken measures against malicious price cuts by real estate companies. Shenyang, Liaoning, Kunming, Yunnan and other places conducted interviews on the “diving” price reduction behavior of individual real estates. Zhuzhou City, Hunan, will sell newly built commercial houses at prices significantly lower than the normal market prices and seriously disrupt the order of the real estate market. Request to remove all listings suspected of low-price sales.

Jiangsu Jiangyin City Housing and Construction Bureau issued a notice stipulating that after the commercial housing sales price is recorded, the actual transaction price of the commercial housing shall not be higher than the recorded price, and low prices (such as lower than cost prices, price reductions in disguise, etc.) are strictly prohibited, and price wars are strictly prohibited. Vicious competition, downgrading of standards and quality, late delivery and other violations of regulations and laws.

Yueyang City, Hunan has also issued new regulations on the property market, requiring that the actual transaction price of new house sales in the central urban area shall not be higher than the record price, and shall not be lower than 85% of the record price, otherwise the online contract record will not be possible.

As the effects of high-pressure regulation in real estate continue to appear, China’s housing prices have slowed down in July. The median estimate of 10 institutions previously visited by Reuters shows that China’s average residential price increase in 2021 is expected to be 3.5% year-on-year, which is lower than the median estimate of 5% in the last Reuters quarterly survey three months ago.

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