China's moves to cool property prices may be working

SHANGHAI (Nov 7): The push by China’s policy makers to rein in property bubbles looks to be getting traction, according to early indicators from the nation’s biggest cities.

Beijing home sales volume plunged 41% year-on-year last month while Shanghai’s slumped 18%, China Real Estate Information Corp. data shows, after new purchase restrictions and tightened mortgage lending. Transactions fell 50% in smaller cities.

Now policy makers must balance deflating property prices with safeguarding the expansion. Efforts to curb excessive gains could cut 0.6%age point from 2017 economic growth, and as much as 1 point with aggressive national tightening, according to Morgan Stanley.

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