Market sentiment about China’s property policy has executed an abrupt U-turn. Early this year, speculation was mounting that the government would loosen its controls on the sector in response to the wider economic slowdown. China’s economy overall is performing no better today, but questions are now being asked as to whether those controls could soon be tightened. The prices of property sector equities have suffered as a result, falling 15% in Shanghai since early July against a wider market decline of only 5%.
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