Analysts expressed their uncertainty over the sudden price surges. Annette Beacher, the head of Asia-Pacific Research for TD Securities, said that the price hikes were concerning and a recent change in government policies could be the cause.
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Beacher said that property price controls and loan restrictions had been scheduled to come into effect in April. The government intended for these changes to make it more difficult to buy multiple properties in China’s expensive cities.
However, Beacher believes that the government restrictions will help to take some of the heat out of China’s surging property market.
Beacher explained that the reports of property price increases were creating speculation that the People’s Bank of China would start tightening. Yet China’s GDP grew only 7.7% in the first quarter of 2013.
“That’s now sending mixed messages that perhaps we don’t need to see widespread tightening,” Beacher commented.
Ultimately, Beacher believes that the Chinese government is making the right choice to target wealthy cities like Beijing and Shanghai with property price controls. This should control the concerning price increases without affecting the rest of the economy, she said.
These property price concerns come shortly after a well known Chinese auditor warned that China’s authorities were swamped by debt – and that it could eventually lead to a financial meltdown.
Source: http://www.abc.net.au/news/2013-04-18/chinese-property-price-surge-fuels-rate-rise-fears/4637182