[photopress:realestate_1_2.jpg,full,alignright]The central bank’s 27-basis-point interest rate increase has had little impact on home and stock prices in the short run. Not a noticeable major effect. Not something that was highlighted in newspapers. But it could somewhat slow down the real estate industry.
Wang Deyong, senior property stock analyst from CITIC Securities, described the rate rise as ‘bad news’ for the industry. He said, ‘Due to the sluggish situation in areas where the real estate companies operate, the rise of property stocks can only last a short time. We predicted the government will soon roll out a new round of macro control measures to regulate this industry, and these measures are very likely to be more intensive than those of last year.’
There is a general acceptance that all the regulatory measures adopted by the central government last year — tax, interest rate, mortgage as well as land policy — failed to rein in the rapid increase of housing prices across the nation.
In view of this, Wang Deyong said, ‘We remind investors to maintain a cautious attitude toward stocks in this particular sector since the whole industry is still in the doldrums.’
He believes that the interest hike will be followed by other macro control measures. He said, ‘These policies are serious tests for the industry.’
Source: China Daily