China Should be Cautious of Hazards in the Real Estate Sector, According to Herald

According to an editorial in the 21st Century Business Herald that cited research from the Bank for International Settlements, "China's monetary policy should be aware of the trailing effect and subprime mortgage concerns while focusing on stabilisin

June 24, 2022 - 11:39 AM 294 views

China Should be Cautious of Hazards in the Real Estate Sector, According to Herald

Market News

© China Should be Cautious of Hazards in the Real Estate Sector, According to Herald

Free Enquiry Now

According to an editorial in the 21st Century Business Herald that cited research from the Bank for International Settlements, "China's monetary policy should be aware of the trailing effect and subprime mortgage concerns while focusing on stabilising prices and the housing market" (BIS).

Key Takeaways

It would take three years for a 1% decrease in nominal short-term interest rates to result in a 5% increase in house values.

However, the publication reported that the Chinese real estate market is not currently experiencing such price increases. In 19 OECD nations, both the home price-to-rent and home price-to-income ratios are higher than they were prior to the 2008 financial crisis, which is causing developed countries to worry more and more about housing bubbles breaking.

The Market Reaction

Despite the BIS's warning, USD/CNY is currently down 0.05 percent on the day at 6.6943 as of this writing.

Learn to Trade with Best and Trusted Global Broker

Start your journey with us and learn from basic to advance with one to one training session. Get full knowledge about the market from our expert team and become expert in market.

Free Enquiry Now:  Click Here

Share With -

 

No comments yet for this post

Please Login to comment this article.

If not a registered user yet, Please signup here