China Property Market Is in Last Phase of `Madness,' PBOC Adviser Li Says
China’s surging property market is having its “last madness” and speculators can’t fight a government resolute about curbing asset-price inflation, central bank adviser Li Daokui said.
Investors “don’t realize how strong and resolute the political will is among top leaders to curb price gains,” Li said in an interview broadcast by the state-run Central Television yesterday.
Property prices surged 11.7 percent in March from a year earlier, the most since records began in 2005, government data showed this week. The State Council yesterday raised mortgage rates and down-payment ratios for second homes to cool the market and damp inflation expectations as the world’s third- biggest economy accelerates.
Real-estate speculation may dissipate in a year or 18 months after local authorities issue more measures to contain price gains and increase the supply of low-price, so- called policy homes, Li said.
The Se Shang Property Index is the worst-performing group on Shanghai’s stock exchange this year. It closed 0.8 percent lower today after earlier falling as much as 1.8 percent. China Vanke Co., the nation’s biggest listed property developer, declined 0.8 percent in Shenzhen. Beijing Capital Development Co. fell 4 percent.
China’s economy is showing signs of overheating and the government faces a “grim” and difficult task in trying to hold full-year inflation to a targeted maximum of about 3 percent, said Li, a professor at Tsinghua University in Beijing. He was appointed as one of three academic advisers to the People’s Bank of China last month.
China reported a faster-than-forecast 11.9 percent gain in economic growth yesterday for the first quarter, while inflation slowed in March.
For Related News and Information: Most-read stories on China: MNI CHINA 1W <GO> Most-read China economy stories: TNI CHECO MOSTREAD BN <GO> For top economic news: TOP ECO <GO> For top China news: TOP CHINA <GO> Credit crunch page: WCC <GO> Government relief programs: GGRP <GO>
Rate this Page