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CPI On The Radar

     BEIJING (MNI) - China's property market should slow to a more reasonable
level next year, E-House R&D Institute said in its annual report on the property
market Friday.
     The Shanghai-based property consultancy said in the 49-page report that the
Chinese government's controls on the sector would continue to weigh on growth.
     The 19th Communist Party Congress in October stressed that "houses are for
living in, not for speculating on" and pledged to improve the property system,
with more of a balance between housing sales and the rental market. 
     From a macroeconomic standpoint, the institute said that China would
maintain a monetary policy with a tight bias, but added that a high degree of
tightening is not likely due to the government's goal to both maintain stability
of economic growth and deleveraging.
     A tight monetary policy could weigh on momentum of the property sector by
dragging down sales and prices.
     As the central government clamps down on surging housing prices, more
measures could be rolled out in cities where property prices continue to edge
up, E-House said in the report, while in the second half of next year curbs
could be loosened in some cities where property transaction slumps lead to the
slowing of inventory reductions.
     E-House predicted property investment growth would be 4% in 2018, which it
called a "neutral outcome." The moderate growth is due to aggressive land
acquisitions by property companies this year, it said, adding that a decrease in
housing starts would drag down further growth of investment.
     Housing starts are expected to dip 2% as property developers face financing
pressures, thus delaying construction projects, the report said. On the other
hand, developers may be more cautious in starting new projects under weaker
demand caused by property purchase restrictions, it said.
     Property sales are expected to drop by 7% year-on-year, E-House noted, with
all city tiers expecting to see property sales edge down under tight policies.
But E-House said the sales drop would not be that significant, given the 7.9%
sales growth in the first 11 months of this year. 
     Housing prices for 70 major Chinese, as monitored by the National Bureau of
Statistics, will continue to narrow and could turn negative in April, while
year-on-year growth could turn negative around August, E-House predicted.
--MNI Beijing Bureau; +86 (10) 8532-5998; email:
--MNI Beijing Bureau; +86 (10) 8532-5998; email:
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