China to Ease Restrictions on Property Prices

China to ease restrictions on property pricesBy the third quarter of next year China may ease its restrictions on the country’s property market as prices drop slowly, affecting the growth of the economy. During the first quarter property prices, sales and investment will fall due to the tightened measures, though the possibility of a market collapse is slim.

The government will be forced to adjust polices when housing prices drop by twenty percent, the steep decline will bring pull down economic growth just below nine percent next year. Although the shift in policy will occur in the 3rd quarter next year, the Central Government will relax credit on the property market and loosen limits on home purchases.

Last year China imposed a measure to curb property prices, including down payments, the number of home limits that a person can purchase, the introduction of property taxes and construction of low income housing. Prices of new housing in Guangzhou and Shenzhen fell on a month to month in October after it remained unchanged for three months prior.

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