Property prices in China could slide within the next 12 to 18 months, as banks cut back on loans to real estate firms, which could possibly slow development, said Hong Kong property developer Vincent Lo.
The government has urged banks to lessen loans to property firms in its attempts to rein in the housing market, said Lo, who is Chairman of Shui On Land Ltd.
“We believe maybe the market is going to go through a tough time for another 12 to 18 months, and then I think it’s a good time to go and buy something when prices are lower,” said Lo.
The country has tightened its property control measures this year, raising mortgage rates and down-payment requirements to ease home prices. In July, the government said that it will curb prices in smaller cities after restricting home purchases in Beijing, Shanghai and other markets.
“For local developers, I think they would be going through a tough time right now,” Lo said. “That would bring the price down.”
Chinese officials have told banks to limit property lending, as the impact of the government’s cooling measures will likely deepen in the next three to five months.
The billionaire property tycoon said he remains bullish on the country’s property markets, as more citizens relocate into cities, creating demand for commercial and residential properties.
“Right now, the commercial properties, if it is in a good location, good design, it will do very well,” Lo said.
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