China Should Be Wary Of Property Market Risks-Herald

China’s monetary policy should be alert to the lagging effect and subprime mortgage risks while focusing on stabilising prices and the property market, said the 21st Century Business Herald in an editorial. A 1% drop in nominal short-term interest rates would lead to a 5% increase in housing prices, taking three years to materialise, the newspaper said citing a study by Bank for International Settlements. But the Chinese property market with already high prices, is hard to take any further price growth, the newspaper noted. Developed countries in rate hike cycles to tame high inflation, face a growing concern of housing bubbles bursting, as both the home price-to-rent and home price-to-income ratios in 19 OECD countries are higher than those before the 2008 financial crisis, the newspaper said.