close
Property

The RBA isn’t confident about China’s property market recovery

Reserve Bank of Australia

Like others, the Reserve Bank of Australia has expressed concern about the recent rebound in China’s residential property market, suggesting that there are growing doubts “about the sustainability of the recovery, particularly for investment”.

In its quarterly statement on Monetary Policy, the bank said, “Housing price inflation has risen, sales (measured as residential floor space sold) have grown rapidly and housing investment has strengthened after a period of weakness”.

“Government policy has played an important role in Chinese housing market cycles and a range of stimulus measures implemented since 2014 has contributed to the latest strengthening of conditions.

It further said, “These policies have encouraged purchases of housing with the goal of reducing inventory levels, which have been high in many parts of the country”.

While Chinese authorities are trying to lessen ballooning inventory levels, particularly in smaller second and third-tier cities, the RBA suggests that they may be attempting to solve one problem by creating another.

Risk Warning:

Please remember that financial investments may rise or fall and past performance does not guarantee future performance in respect of income or capital growth; you may not get back the amount you invested.

There is no obligation to purchase anything but, if you decide to do so, you are strongly advised to consult a professional adviser before making any investment decisions.

Paul

The author Paul