Chinese developers’ hopes that Beijing would ease property curbs to bolster a slowing economy
were dashed as the country’s top decision-making body discussed ways to support domestic demand including boosting consumption and manufacturing investment.
The Communist Party’s Politburo, which met on Tuesday to lay out economic policies for the second half, warned against “using property as a tool to stimulate the economy in the short-run”, the first such statement in history.
“We should adhere to the principle that housing is used for living, not for speculation, implement the long-term mechanism for real estate, and not use property as a short-term means of stimulating the economy,” the Politburo said in a statement released after the meeting.
The Hang Seng Mainland Properties Index declined 2.1 per cent at the close of trading on Wednesday, along with most developers in Hong Kong and mainland bourses. China Vanke was the biggest loser, shedding as much as 3.6 per cent, before closing 2.2 per cent lower.
Analysts said the hawkish stance echoed earlier moves to tighten developers’ funding, calling off cities’ tentative loosening and upgrading curbs in cities including Kaifeng, Suzhou and Dalian, which together were meant to deter other city governments from implementing easing measures.
Xu Xiaole, chief analyst with the research arm of Ke.com, China’s largest property agents’ platform, said that the government has been using the housing sector since 1998 as a hedge against economic malaise.
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