2017-03-20zerohedge.com

On month-over-month basis, house price growth diverged among different city tiers. Home price inflation decelerated in tier-1 cities, but home price inflation in tier 2/3/4 cities was steady or accelerated, which goes back to the core issue discussed last Friday: for all the talk about moderating home prices, China is first and foremost focused on preserving the wealth effect, which a sharp drop in home prices would crush.

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In short, China evaluted the risk of a potential housing bubble burst, and deciding that - at least for the time being - it is not worth the threat of losing a third of Chinese GDP in "wealth effect", got cold feet.



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