China will likely ease some property market curbs in 2012, following predictions that slumping prices could affect economic growth, according to a Renmin University report.
China introduced various measures to reduce property prices last year, including a hike in the minimum down payment for buyers, a ban on acquiring second homes in some cities and property taxes.
However, Beijing-based Renmin University said that the government will likely relax bank lending limits in the property sector and purchases of new homes by Q3 2012.
Industry analysts and officials are divided over whether the government might ease curbs, originally introduced to cool the red-hot property sector after an increase in prices made homes unaffordable for many.
Recently, Chinese Premier Wen Jiabao dashed any hopes of a short-term change, noting that housing prices must revert to “reasonable levels”.
The report argued that cash-strapped local governments rely heavily on land sales revenue. Meanwhile, the central government will only intervene to prevent property prices from falling by more than 25 percent.
An estimated 9.2 percent GDP growth is expected in 2012, against 9.4 percent this year.
The report also said property prices and sales volume may continue to fall in Q1 2012, but a large-scale sell-off and hard landing for the economy is unlikely.
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