From Xinhua Writer Zhang Zhongkai (Note that Xinhua News Agency is the state press agency of the People’s Republic of China. Xinhua is a ministry-level department subordinate to the State Council):

  • China’s property market might have outgrown its boom days, but predictions of an imminent property bubble burst and economic crash are premature
  • Public anxiety was ignited on Monday by media reports of real estate developers lowering prices in east China’s Hangzhou and Changzhou cities and a commercial bank’s decision to halt some property financing business
  • The moves by property developers and banks should not be over-interpreted
  • Their decisions are rational precautionary reactions toward market changes and business operation problems and only indicate the real estate market differentiation in China’s cities
  • It is fair to say the property markets in some cities, especially third- and fourth-tier cities, are burdened with overcapacity and face mounting debt default risks
  • But for megacities like Beijing and Shanghai, the property market will likely remain robust
  • The fuss is not new, given the non-stop hype about China’s economic hard landing, but the facts tell a clearer story
  • January and February always see lukewarm property purchases due to China’s Spring Festival
  • The latest data show housing prices in most Chinese cities still kept rising in January, albeit by a smaller margin
  • Meanwhile, China’s urbanization rate is currently only over 53 percent, still far behind developed countries, which usually boast urbanization rates of over 70 percent
  • The continued urbanization drive will boost demand for quality real estate projects
  • Therefore, it is unreasonable to predict an overall property market crash over regional jitters.
  • Most importantly, it should ring the alarm for profit-seeking property developers and GDP-fixated local governments to rein in irrational real estate development and proactively adjust policies before it is too late

I’ve reproduced much of the article above, but there is a little more at the link

(And, once again … note the source of this article. Xinhua is an officially-sanctioned outlet).