Higher deposit reserve ratio accelerates house price declines, experts say

May 2, the People's Bank of China decided to increase the reserve requirement ratio from May 10 to 0.5% to 17%. This is the 3rd time this year to raise the reserve requirement ratio.　　A total of $900 billion will be frozen for 3 times.　　This increase in reserve requirements, by changing financial policy expectations, tightening monetary, release further adjustment of financial policy, tightening monetary, credit strict signals, investors in particular, real estate investment speculators to form a certain blow, even the signal role will be greater than the actual role.　　Earlier, April 17, the State Council issued a "new country 10", offering the most stringent regulatory measures in the history, the overall increase in real estate control, strengthen real estate regulation, in order to combat investment speculation, curb house price rise. In the history of the most stringent real estate regulation, the real estate market will return to adjust the channel, house prices will decline. Still, since the central bank has not raised interest rates, the current rate level is actually in negative interest rates, coupled with a large number of credit and sales growth last year, some developers do not feel the pressure of the capital chain, and some people still doubt the central government to regulate the durability of real estate and attitude of the firm,　　Believe that prices will not rise or only a small fall soon after the retaliatory rallying, so, in addition to most investment speculators ready to reduce prices or have begun to sell, some developers and some investment speculators are still on the sidelines, the current new house prices are not obvious. The increase in the reserve requirement ratio can be seen with the recent real estate control policy, will change the financial environment of the real estate market, strengthen the effect of real estate regulation, promote the real estate market mentality change, especially to make some still on the sidelines of the developers and hold house speculation to give up wait and see, and aggravate consumers wait and see even abandon purchase mentality　　In turn, accelerating the decline in house prices, prompting the market to accelerate the correction. Chen Sincere national Real estate Managers union executive director, famous real estate experts