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Ren Xingzhou

Risk analysis of real estate markets and suggestions

2014-07-22

By Ren Xingzhou, Liu Weimin and Shao Ting, Institute of Market Economy, Development Research Center of the State Council (DRC)

Report No 48, 2014 (Total 4547)

Summary:

As China's real estate business balances supply and demand, the country needs to be cautious about blindly stimulating the market during a period of regular fall in real estate investment, as the gap between regions widens, with first-tier cities seeing housing prices rise and ordinary cities with a housing excesses.

And, the loosening of interest rates has a great impact on real estate credit and if there is a decline in the market, some local governments will face the risks of reevaluating the mortgaged land.

This study suggests that the country do as better job of guiding housing for living and encouraging sales of the first or small to mid-sized housing. It also needs moderate financial policies for housing and a reasonable land supply system, a real estate taxes system, and a more comprehensive, systematic and updated urban housing information system to improve market management.