Wong said that rising property prices can help stimulate the economy in several ways, such as by encouraging buyers to accelerate purchases before the cost goes up, thus bringing forward future demand.
Another positive result of costlier housing, she said, is that savings will move out of banks and into the real economy.
A booming property sector would also increase new jobs centered on the construction industry, and developers’ increased demand for land would mean local governments can rake in more revenues from land sales to invest in infrastructure.
“So the new economy of China is great, but then it really is the old economy that’s going to be a very predictable macro tool for China in times of urgency,” she said, referring to the distinction between headline-grabbing tech firms like Alibaba and long-standing sectors such as construction.
Land and housing have seen immense changes in the 40 years since the Communist Party began opening up China’s economy to free market forces.
One of those reforms was allowing citizens to own property. As China’s economy has grown into the world’s second largest, many have seen their homes become a key source of personal wealth.
Wong said that potential buyers are in a good position because prices are currently affordable and there is plenty of room to take on mortgages.
“Overall, the China property market is just not leveraged,” she said, stressing that household cash savings outnumber outstanding mortgages three to one.
“So this is an industry that’s still got a lot of leeway to leverage up, which we believe would happen,” she said.