By: Beijing Monitoring Desk | Li Zheng
BEIJING: Over half of Chinese households think housing prices are too high and more than a quarter worry these will rise more, according to a central bank survey, adding to views authorities may have to take more property cooling measures even at the risk of dampening economic growth.
The survey by the People’s Bank of China (PBOC), published on Tuesday, found that 52.2% of urban households believed housing prices were “unacceptably high” in the first quarter.
That was a slight decline from the previous quarter but higher than in the first three months of 2016.
Also on Tuesday, a PBOC official told Reuters that China’s central bank has advised banks in its annual guidance, which is usually not published publicly, to appropriately adjust mortgage lending policies in 2017 to match local housing conditions.
The official said banks must strictly abide by city-based credit policies and strengthen supervision over source of funds for property downpayments.
RED-HOT PROPERTY
In the guidance, PBOC asked banks to adjust measures such as their downpayment ratios, discounts to mortgage interest rates, and the maximum period allowed to pay back mortgages, the official said.
China’s red-hot property market picked up pace in February after price gains had slowed in the previous four months, in spite of a raft of new government curbs aimed at tempering speculative demand.
The PBOC survey showed that 27.2 percent of households expect housing prices to rise in the second quarter. Despite steep prices, 22.9 percent of households plan to buy properties in the next three months, 2.8 percentage points more than in January-March.
Two separate PBOC surveys, also released on Tuesday, showed banks and businesses became significantly more optimistic in the first quarter as China’s economy showed signs of improvement.
The percentage of bankers feeling confident increased to 64.9 percent in the first quarter, from 53.7 percent in the preceding three months, one survey said. However, 20.3 percent of bankers said monetary policy was “relatively tight” in January-March, up from 5.7 percent the previous quarter.
According to the survey, business confidence among entrepreneurs improved notably in the first quarter, to 61.5 percent of respondents from 54.1 percent in 2016’s fourth quarter.
The PBOC has moved to a tightening bias this year following six benchmark interest rate cuts in 2014-2015 as the economy stabilises and the focus turns toward credit risk. It has bumped up short-term interest rates three times this year.
(Writing by Yawen Chen; Editing by Richard Borsuk)
Source: Reuters