PBOC’s Ma Says China Must Act to Contain Housing Market ‘Bubble’

  • Research bureau chief economist Ma Jun speaks to Business News
  • Cities from Shanghai to Shenzhen have been tightening policies

Ma Jun.

Photographer: Brent Lewin/Bloomberg

China should take steps to restrain bubble-like expansion in housing markets and tame excessive financial inflows into property, according to a central bank economist.

"Measures should be taken to put a brake on the excessive bubble expansion in the property sector, and we should curb excessive financing into the real estate sector," Ma Jun, chief economist of the People’s Bank of China’s research bureau, said in an interview with China Business News. A third of the financial-system leverage added over the past decade has come from the surge of housing prices, Ma said.

Cities from Shanghai to Shenzhen have been rolling out tightening measures this year as local officials tackle overheating that followed monetary stimulus. Meantime, central bank policy makers are grappling with how to support growth without spurring unsustainable price gains in housing and other assets. The PBOC’s easing cycle since late 2014 included a series of cuts that pushed interest rates to record lows, where they’ve been since October.

"The PBOC will be very cautious about the impact of further monetary policy easing," said Raymond Yeung, chief greater China economist at Australia & New Zealand Banking Group Ltd. in Hong Kong. The central bank "is wary of the overheating property market and fast-rising mortgage loans."

— With assistance by Miao Han

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