People’s Daily: Should the Govt Rescue Housing Market?

Home prices have barely dipped, but already there’s some expectation of a rescue, enough to have the People’s Daily warn it isn’t coming. The People’s Daily focuses on one of the hottest cities in 2016: Hefei.

iFeng: 人民日报:房价降了,政府就得出手“救市”吗?

Spring came, all things recovery, soaring all the way last year, booming Hefei, the property market is more chill. Existing homeowners cut prices 4,000 yuan per square meter and nobody cares, existing housing fell more than 10% are not a few. There are also insiders said that before and after the Spring Festival this is the property market sales off-season, part of the second-hand housing listing price decline can not represent the overall situation of Hefei property market, the so-called “crash” is actually artificially created illusion. In any case, there are indeed individual owners “sit still”, and even put forward the hope that the government “shot rescue”.

Owners of the “sit still” can understand. Did not buy a house, no one wants the price is low, once bought the hand, no one wants to preserve and increase value. House prices drop, the most important family wealth saw shrink water, put who are not happy. The healthy and stable development of the real estate market is both beneficial to the ordinary people and an important goal of the government administration. Housing prices rose too fast, the Government has to take control measures to stabilize the market’s responsibility; then, house prices down, the government also had to “rescue” it?

Careful observation of this round of Hefei property market cooling, regardless of the degree to judge, or from the principle of analysis, are really difficult to find the reasons for government intervention.

The People’s Daily sends two messages. One: the government should prepare for an eventual bear market and be ready to respond before it arrives. Two: for now let the speculators burn.

Remove all possible after it is not difficult to find, the existing home prices fell the most sensitive, the most “sad” group is likely to have bought at last year ‘s high, the next few years intend to “go hand in hand” owners. And they, often do not belong to “immediate housing need”, because the short term to buy, sell is actually “house flipping”, and “houses should not be flipped.” Since these people are mainly investment speculation, then, and other market transactions, please rationally deal with the normal price fluctuations. House prices down, some people go bust, but for real homebuyers, their dream of homeownership comes closer.

Hefei probably will not be the only city to adjust this year. That being the case, those cities where prices rose too fast in the early stage, should also be expected to bring down the consequences of falling prices, a rainy day, carefully screened, effective response.

Author: 罗臻 http://www.investinginchinesestocks.blogspot.com

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