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China property rebound may spell danger

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China property rebound may spell danger - China - property market

HONG KONG (MarketWatch) –- A pickup in residential-real-estate sales should be seen as a negative indicator that could force an about-face by Chinese policy makers, analysts said Tuesday.

Analysts at Singapore’s UOB flagged concern about an overly quick turnaround in the mainland-China property market, cautioning that a snap rebound in prices would be viewed with grief in Beijing

UOB described recent residential-sales gains as a “fierce reaction” to the People’s Bank of China lowering its lending and deposit rates by a quarter-point earlier this month.

“With the recent interest-rate cut and, thus, cheaper mortgages, the housing market is seen heating up again in some major cities,” UOB analysts said in the note.

Chinese home buyers were now expecting more policy-easing measures and were also increasingly wary that developers could soon lift prices, the analysts said.


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