According to The Wall Street Journal, the more China tries to rein in its roaring housing market, the more obsessed people get about buying. In February, with this southern megalopolis in the throes of a property frenzy, state banks raised mortgage rates. Then came higher down-payment rules for second homes and limits on owning multiple apartments. The result: Prices have climbed 18% in Guangzhou in recent months. With each new policy intended to restrict home purchases, buyers are piling in. Stressed about the prospect of being left behind, many are borrowing heavily, believing prices will continue to rise despite the restrictions and will soar if the government has to lift restrictions to spur economic growth. Long-term household loans, mostly mortgages, now account for one-third of all new bank loans. Household debt stands at more than 42% of GDP, according to Moody’s. That ratio has grown 9 percentage points in three years.
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