Beijing's property market is now a major source of financial risk, warns Xu Zhong, the head of the People's Bank of Beijing's research bureau, adding that the China government cannot continue to rely on adjustments to monetary policy alone in the hopes of resolving the "serious" issues caused by the property sector. He believes a property tax should be imposed on homeowners along with stricter controls. “Real estate has serious problems such as crowding out investment (from other areas), impeding the transformation and healthy development of the economy, and is also an important source of financial risks”, says Xu.
China's property market is now a major source of financial risk, warns Xu Zhong, the head of the People's Bank of China's research bureau, adding that the Beijing government cannot continue to rely on adjustments to monetary policy alone in the hopes of resolving the "serious" issues caused by the property sector. He believes a property tax should be imposed on homeowners along with stricter controls. “Real estate has serious problems such as crowding out investment (from other areas), impeding the transformation and healthy development of the economy, and is also an important source of financial risks”, says Xu.