CHINA’S PROPERTY PRICES

CHINA SEEN EASING PROPERTY CURBS IN 2012: REPORT

AFP, November 21, 2011 

SHANGHAI — China will likely relax some property market curbs next year due to concerns that slumping prices could hurt economic growth, a prominent Chinese university said in a report published Monday.

China has introduced a range of measures aimed at bringing down property prices in the last year, such as bans on buying second homes in some cities, hiking minimum down payments for buyers and introducing property taxes.

But Beijing-based Renmin University has forecast that the government would likely relax limits on bank lending to the property sector and purchases of new homes in the third quarter of 2012, said the report published in the state-run China Securities Journal.

Industry officials and analysts are divided over when the government might ease curbs, originally put in place to cool the red-hot property sector after a surge in prices put homes out of the reach of many.

Chinese Premier Wen Jiabao recently dashed hopes of any change in the short term, saying housing prices should return to "reasonable levels".

But cash-strapped local governments are heavily reliant on revenue from land sales, and the central government will likely intervene to prevent property prices from falling more than 25 percent, Renmin University said.

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