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BEIJING: China will stand down from its property tightening campaign before the end of this year because the economy has already started to cool and housing price rises have also slowed, Jones Lang LaSalle (JLL), a global real estate agency, said on Tuesday, June 8.
In a partial reversal, Beijing may order banks to increase mortgage loans to first-time home buyers to boost transactions in order to avoid a hard landing for the economy, said Michael Klibaner, China research chief at the firm.
"I believe the next move will be loosening, but wouldn't necessarily require an official change in stance," he said.
Beijing announced a slew of tightening measures in mid-April, including raising down-payments and mortgage rates, which have caused transactions to plummet and property inflation to slow in many cities.
Any further tightening, including a much-debated property tax, looks unlikely as China grows more worried about an abrupt slowing of the economy, partly due to European sovereign debt troubles, Klibaner said.
Official data to be released on Friday is expected to show that the Chinese economy remains robust but has eased off its torrid pace earlier this year.
Developers will cut prices by 10% to 15% sooner rather than later to lure back buyers and help them maintain their cash flows, Klibaner said.
"Those views from outside of China and concerns about a hard-landing of the economy, I think it's an unlikely scenario," he said. -- Reuters
