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BEIJING: China will neither step up or relax current property tightening measures unless home prices suddenly surge or fall sharply, the official Financial News said in a commentary piece on Monday, June 20.
Even though some Chinese property developers are delaying project launches and holding off price cuts in the hope that Beijing may soon loosen policy to foster China's economic growth, the newspaper poured cold water on such expectations.
"Don't expect China to scrap administrative restrictions on home purchases soon and relax other tightening measures for the sake of economic growth," the newspaper said.
The paper, which is run by the People's Bank of China but does not always represent the views of the central bank, said current modest fluctuation in home prices is just what Beijing wants.
"It means property prices are basically stable and have a minimum impact on the economy," it said. "It also means the property bubble is gradually being deflated."
"Unless supply-demand balance breaks and home prices lean towards one of the extreme directions, the May data will convince policymakers to keep its current property policies unchanged," the newspaper said.
The newspaper remarks come after data showed on Saturday that China's housing inflation eased a touch to 4.2% in the year to May, down from April's 4.3%.
Home prices were still rising in big cities in May, albeit at a slower pace, the data showed, with only a handful of cities showing price declines.
Such stubbornly high prices have led some investors to speculate there is a property bubble brewing in the world's second-largest economy.
Standard & Poor's ratings agency on Wednesday lowered its outlook for China's real estate market to "negative", from "stable", and predicted property prices will fall 10% over the next 12 months. Moody's also downgraded the sector in mid-April while Fitch has a stable outlook. — Reuters
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