According to the RICS Global Real Estate Weekly, there are some tentative signs that the Chinese economy is cooling down following the gradual withdrawal of stimulus.

RICS expects growth in China’s real estate prices and construction activity to start to ease back over the second half of 2010 as tighter monetary policy raises risk premiums on lending and development activity.

The report stated that property prices in China rose at their fastest pace in 5 years in the year to March climbing by 14%. However, RICS stated that “the headline results masked some moderation in the more recent price trend and could suggest that measures to clamp down on speculation are starting to take hold. The house price index which has been running since July 2005 and covers 70 urban centres has seen growth in prices ease to around 1% in the three months to April, which compares to 1.8% in the three months to January.”

“The slowing trend follows on from a series of property specific regulations rolled out over the last few months such as raising the deposit requirements and lending rates for property purchases amongst other microeconomic policy measures,” stated the report.