China's new normal of relaxed house price increase

China’s home prices have been rising at a fast pace in the past decade, thus causing

a series of problems, for instance, the large amount of investment in real estate, the high rate of vacancy, the rapid rise of the real estate price. As a result, the central government have devised restrictive policies aimed to slow down the rising momentum from 2010. But the regulation effect of real estate market is not very obvious. （图：房地产开发企业土地购置面积）

Actually the reason for the depression of the property market in 2014 and 2015 is called the new “economic normal” in China. The “new normal” is featured by the fact that the economy in China has changed from previous high speed growth into medium-to-high-speed growth during this period of time. （GDP 图表、关键词图）

The GDP declines continuously in recent couple of years, and the growth rate of investment in real estate slows down as well. For example, people often talked about how much more the prices of the real estate market would continue to rise in past five years. However，the new “economic normal” have changed people’s general expectations for the real estate sector. Now nearly all the second-tier cities are facing the “inventory” issue. （图：房地产投资）