Restrictions placed on the property market in 2010 to deflate the real estate boom are quietly being lifted at the local level. In only six of China’s 47 municipalities that imposed them do they remain in full force. At central government level there have been a series of targeted steps taken to support the market, the latest being this week’s reopening of the discount residential mortgage market for first-time buyers by the big banks.
Four consecutive months of falling real estate prices have left policymakers concerned about the knock-on effect on the broader economy, from worsening unemployment to heightened stress on the financial system — not to mention a loss of personal wealth among government and Party officials.
It is the softening labour market that is uppermost in their minds. The HSBC preliminary purchasing managers’ index for September points to increasing job losses, even though the mini-stimulus introduced in the second quarter appears to have stabilized what was becoming a too fast a slowdown.