The “2017 Real Estate Blue Paper” released by the China Academy of Social Sciences expects sales growth to ease this year and prices to remain stable, undercutting expansions in personal home loans.
CASS notes that the central government’s determination to ensure that “houses are used to live in and not for speculation” and stymie real-estate related risk will likely prevent the onset of bubbles in hotspot cities.
The report said that this year the government’s real estate policies had shifted from a focus on restocking to equal focus on both restocking and bubble prevention. It expects policy to remain tight in hotspot cities this year, and foresees a decline in demand for personal home loans.
CASS also calls for the government to vigorously promote the development of a residential leasing market over the long-term with statutory measures and standardisation not leasing enterprise development.
Diversification in property market trends across Chinese cities
According to the blue paper first-tier cities are currently entering a “property stocking phase,” with space for the development and construction of new homes under heavy pressure. It expects the residential leasing market to become the new area of opportunity for development of the real estate sector.
The paper also asserts that the property market in second-tier cities is overheated, and that there is a strong likelihood of a price and volume adjustments in these jurisdictions.
Some second-tier cities still possess strong potential for further growth, in particular those with industry and demographic support, such as Tianjin, Zhengzhou and Wuhan.