Beijing has significantly raised the stakes in tightening measures targeting the property sector. New quantitative regulatory targets capping developers’ liabilities growth are likely to meaningfully slow construction activity, new starts, and land purchases. More price cuts will be needed to keep housing sales moving. These cuts may boost sales in the short term, but price declines will weaken longer-term investment-driven property demand and add to financial pressures for an industry already facing a highly unbalanced market.
