Although housing prices are still moving up, volume slowed in July. Buyers seemed to be retreating back into their "watch and wait" mode. Predictions made from this are not of great value. The market does not appear to follow a logical pattern.
After the China Banking Regulatory Commission (CBRC) announced it would tighten lending for real estate (or at least look at fine tuning the way it was done), Ministry of Housing and Urban-Rural Development officials noted that they would monitor the risk of rising housing prices in large cities.
China Information, a newspaper under the National Bureau of Statistics, published an article entitled "Worrying about Skyrocketing Housing Prices," which pointed out that given the current circumstances, ever rising prices are becoming an obstacle for urban residents.
From early this year, housing prices in China’s eastern cities have increased by more than 15%. In Shenzhen in June, prices reached 14,197 yuan/square meter, up 29.4% in only 4 months.
China Stakes reported that past experience with China’s real estate market suggests that credit policy, not supply, is the decisive factor in the rising or falling of prices. The same may be true this time.
Price rises slowing soon could be caused by the CBRC tightening audits for the second housing loans. This policy has already slowed down direct support from banks. Real estate speculators rely on the low down-payments and high credit to invest. So, if you follow the logic, housing prices MAY, may, just stabilize. Do not hold your breath waiting for it to happen.