Monday, February 26, 2024
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Urbanization plan could further cool China property

China's fresh urbanization plan could establish a floor for the country's cooling property market, analysts told CNBC.

Authorities unveiled the National New-type Urbanisation Plan on Monday, which detailed plans to increase the amount of Chinese people living in cities to 60 percent from 54 percent by the end of 2020, through huge investment in transport networks, urban infrastructure and residential real estate, together with reforms to the country's registration system.

(Read more: China's property market shows further signs of easing)

According to Alaistair Chan, economist at Moody's Analytics, continued strong demand for city property should put a floor under house prices.

"Now that the 70-City house price index has peaked showing that prices in the major cities are coming down, the government is under pressure to reduce restrictions. I don't think they will do that, but the new urbanization plan could be a method of putting a floor under prices," he said.

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