China’s property speculators make a dangerous bet
In 2016, Hefei, a manufacturing hub of about 8 million people in China’s east, was one of the world’s hottest property markets and a prime target for price curbs designed to knock speculative heat out the sector.
Analysts say restrictions introduced last year and subsequent rhetoric from policymakers should have sent a very clear signal to investors that authorities would tighten further in Hefei and elsewhere. Instead, speculators in Anhui’s provincial capital are betting just the opposite – that the government will ease curbs to support growth. Investors like Zhou Xiansheng say they are in no rush to sell their holdings.
“Prices have only gone up in the past… The government will not let the market correct as long as property is still the pillar of economic growth,” said Zhou, a businessman who owns multiple homes in Hefei.