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    Home > Coatings News > Paints and Coatings Market > Stop falling back, will the new housing policy blow the building bubble?

    Stop falling back, will the new housing policy blow the building bubble?

    • Last Update: 2021-02-14
    • Source: Internet
    • Author: User
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    China Paint Network
    : relying on real estate to accumulate wealth of the "great good times", the real estate market "super boom" period has ended! China's houses have gradually returned rationally to their residential functions and are no longer a tool for investing to get rich.
    , sales of new homes in 70 large and medium-sized cities fell 5.7 per cent year-on-year in February, according to data released by The National Bureau of Statistics. This is the largest decline since the implementation of the current Residential Sales Price Survey Scheme in January 2011 and the sixth consecutive month of decline. On a month-on-month basis, new home sales fell 0.4 percent in February from the previous month, the 10th straight month of declines . . .
    Shortly after the National Bureau of Statistics data was released, on March 30, the Chinese Ministr bank, the Ministry of Housing, Urban and Rural Development and the China Banking Regulatory Commission issued a notice announcing a reduction in the down payment ratio for first homes to 20% and for second homes to 40%. China's Ministry of Finance also issued a document lowering the threshold for exempting individuals from business taxes on the sale and purchase of ordinary housing from five to two years.
    a series of policies, known as the "New Deal on Housing." As a result, this relaxation of the new housing policy, will make China's housing prices stop falling and rebound from the talk of a re-start. Is that more likely? I don't agree.
    because, from the end of last year, Chinese rely on real estate to accumulate wealth of the "great good times", the real estate market "super boom" period is over! China's houses have gradually returned rationally to their residential functions and are no longer a tool for investing in wealth (including investing in front-of-the-door shops, which are also risky).
    Economically, in the final analysis, any of humanity's most basic needs (e.g. air, water, food, etc.) should not have been a financial investment product (not to be used for speculation). Houses are a necessity for ordinary people and the most commodity they buy, and even if they spend their life savings, the vast majority of families need to ask for bank loans or they won't be able to buy a house.
    Is also the characteristic of this credit consumption model, seriously distorting the supply and demand relationship in the property market - as long as there is a willingness to buy a house, you can get a mortgage from the bank, which artificially distorts the real supply and demand relationship (in economics, the real "demand" means not only the need, but also the ability to pay).
    clearly, the reason for the housing boom of previous years is that countless investors will buy a house not just to live in, but as a profitable investment vehicle. Coupled with the global environment, central banks are constantly lowering interest rates, making the world's multi-property prices rising day by day. And the higher the house price, the more it will stimulate investment expectations that will continue to rise (in fact, strictly speculative mentality). As a result, the housing bubble blows bigger and bigger, so the higher the house price speculation. As a result, the more money buyers borrow from banks, the more leverage they have to borrow.
    , there is history, real estate overheating and economic crisis, sustained high housing prices will lead to the financial crisis, even economic crisis! The banking system is at risk of "debt write-downs" as real estate is bound to lend heavily. According to the theory of modern economic tuition fees, the risk of deflation comes from debt, whether companies or individuals, in the face of rising debt, they have to tighten consumer spending, the decline in spending power is the result of rising debt levels.
    china's economy can only ensure sustainable and healthy growth if it restores its primary residential function and treats it as a consumer product like televisions and cars, rather than investment (or even speculation).
    it is gratifying to note that on April 18th the latest figures from the National Bureau of Statistics showed that 50 of the 70 large and medium-sized cities had recorded falling house prices compared with March, with 12 cities rising and eight flat. Among the month-on-month price movements, the highest increase was 0.7 per cent and the lowest was a 0.9 per cent decline. Compared with the same month last year, prices in all 70 large and medium-sized cities fell. From these data can be seen, in general, in addition to the first-tier cities, the vast majority of housing prices are still falling, reflecting the real relationship between supply and demand, China's property market is still in the rational return.
    , china's investment growth rate has been declining in recent years after years of huge investment booms. In the long run, as China's economic growth slows and housing prices fall (except in first-tier cities such as Beijing and Shanghai, which are likely to remain the same), land revenues fall, just as in the wake of the 2008 financial crisis in the United States, banks have plunged into a cycle of self-tightening in order to protect themselves from lending, despite the Federal Reserve's ultra-low interest rates. In fact, there is a global risk of deflation, and China is no exception. Premier Li Keqiang also stressed that China is ushering in imported deflation!
    hope that the "Real Estate New Deal" will not blow the bubble of China's property market again!
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