Beijing once again warns investors against betting on China’s red-hot residential property market
- Those who believe property prices will never fall will pay a big price, CBIRC Chairman Guo Shuqing tells Shanghai forum
- Guo’s remarks show regulators are wary of housing bubbles: analyst
Investors were warned about severe losses arising from a potential boom and bust cycle in the sector, by Guo Shuqing, chairman of the China Banking and Insurance Regulatory Commission (CBIRC), on Thursday. Guo, who was speaking at Lujiazui Forum in Shanghai, also warned investors against speculation on the yuan’s foreign exchange rate and gold and commodity futures.
“Those individual investors who participate in trading [of high-risk products] are indeed taking a gamble. They are set to suffer losses, just like those who believe property prices will never fall. At the end, they will pay a big price,” he said.
Chinese policymakers and financial regulators want to prevent a housing market collapse such as that seen in Japan in the late 1980s. They have launched austerity measures to cool buying interest whenever big price increases have occurred.
“Guo’s remarks show regulators are wary of housing bubbles,” said Wang Feng, chairman of Shanghai-based financial services firm Ye Lang Capital. “Risks arising from a potential bursting of home market bubbles could be detrimental to the financial system.”