China should take steps to restrain bubble-like expansion in housing markets and tame excessive financial inflows into property, a People’s Bank of China (PBOC) economist said.
“Measures should be taken to put a brake on the excessive bubble expansion in the property sector and we should curb excessive financing into the real-estate sector,” Ma Jun (馬駿), chief economist of the central bank’s research bureau, said in an interview with China Business News.
One-third of the financial-system leverage added over the past decade has come from the surge of housing prices, Ma said.
Cities from Shanghai to Shenzhen have been rolling out tightening measures this year as local officials tackle overheating that followed monetary stimulus.
Central bank policymakers are grappling with how to support growth without spurring unsustainable price gains.
The bank’s easing cycle included a series of cuts that pushed interest rates to record lows, where they have been since October last year.
“The PBOC will be very cautious about the impact of further monetary policy easing,” said Raymond Yeung (楊宇霆), chief greater China economist at Australia & New Zealand Banking Group Ltd in Hong Kong.
The central bank “is wary of the overheating property market and fast-rising mortgage loans,” Yeung said.
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