China’s austerity measures are not likely to increase in severity and property tightening measures should begin to loosen in the first half of next year, Bloomberg reported, citing a Citigroup (C.NYSE) report. The government may have to consider the impact on rising inflation if liquidity flowed out of the property sector, said Citi analyst Oscar Choi. "With the government shifting its policy focus to inflation control, we expect policy risks for the property market to stabilize," Citi said in a report. "The property market for sure is not immune to interest rate or reserve-ratio requirement hikes, but more property-specific measures are unlikely," it said. October inflation rose 4.4%, the highest in two years, against an 8.6% rise in home prices, the slowest growth in 10 months.
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