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You are at:Home»Investment»Why are real estate prices in China only grow

Why are real estate prices in China only grow

February 18, 2019

In the midst of the financial crisis in China, real estate prices began to grow at a long time. Moreover, this phenomenon began to acquire such a scale that the government forced to intervene in the situation. In China, real estate prices have grown at a great pace. The government was forced to take emergency measures, that is, to introduce the regulation of housing prices. As a result of the measures taken, according to the State Statistical Bureau, the total price level was reduced by 0.1% compared to April. This was the first decrease in prices over the past year and a half. Housing prices in China began to rise at the beginning of 2009, and by June in the annual dynamics of prices, prices became equal to 4%.The Chinese government was concerned about such an increase, and took a number of regulatory measures, such as the restriction of the number of loans issued on a mortgage, a resolution prohibiting to buy more than one unit of real estate in the country. On the first point, it should be noted that it can be very easy to apply for a loan. The problem is to successfully pay it, taking into account a small average wage in China. According to experts, the price decline in the Chinese real estate market is an important event in the further development of this market. Experts expect a lull in this market due to the fact that the price reduction will continue. This can cause the concern of investors, which can cause an economic decline in the country, provoked by government measures to refuse large expenses for financing programs conducted to combat the financial crisis. Tighten measures taken by the Chinese government will gradually weaken. This is facilitated by the policy of Chinese banks, according to which certain restrictions that were proclaimed by the government are not fully implemented in practice.

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