Easing could re-inflate China’s housing bubble

Easing could re-inflate China’s housing bubble
10/08/2018 , by , in INTERNATIONAL

MONETARY relaxation could magnify China’s housing headache, with Beijing wanting a more active fiscal policy to support wobbling economic growth.

A crackdown on shadow banking had cooled speculation, but easing tends to find its way into real estate one way or another. A thicket of rules might slow, but not stop, capital from pouring back into a frothy market.

China’s property booms and busts tend to broadly track monetary conditions.

So the government’s call on July 23 for a more active fiscal stance – combined with indications the central bank might dial back its deleveraging drive – prompted speculation that another boom might be in the offing.

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