Introduced to stabilise the property market, the concessions had been geared at helping buyers of ordinary housing when interest surged.
While market views stay diverse on whether a policy tightening is impending, Colliers International sees no immediate need for drastic measures to cool the market which, it said “has not elevated to a bubble”. In any case, any withdrawal of the concessions would have no direct impact on the luxurious residential market, the international consultancy pointed out.
Macro conditions, it noted, are not justified for a full-fledged tightening of the market. The China economy has just bottomed out in Q1 2009 with an upturn in Q2. Although Q3 witnessed a stronger rebound, the recovery is still fragile.
Concerns about a possible policy tightening had been prompted by China’s growth to 8.9% in Q3, 2009 and higher loan growth in September which had given rise to fear of inflation. Add to this a recent strong surge in the residential market and banks’ tightening of mortgage rates for the purchase of second property.
Outside China, interest hikes had been reported in Australia in September, followed by Norway late last month. A second round of hike in Australia took place on Nov 3.
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