Capital appreciation potentials of Chinese residential market : identification of investment opportunities

[摘要] (cont.) In terms of residential market dynamics, our models have revealed that the increase in sales transaction volume, the decline in real prime rate, and the loose mortgage policy have all contributed to the overheating of the Chinese residential market in 2007. But as the monetary policy and lending standards tighten, the sales volume was curbed and prices lost its steam. We observed that the policy change was not the only cause to the slowdown in sales transaction volume, but also the continued sales price growth; in fact, the policy change was a cause of the over-heated market. If the current pattern continues and supported by favorable policy, we expect the market shall show signs of relief in 2010; however, if prices over-shoot in the coming months, the market performance may actually reverse.

[发布机构] Massachusetts Institute of Technology