Beware housing bubble

The banking regulator's firm requirement of mortgage for buying a second home is a clear sign that Chinese policymakers are serious about the possible risk of a housing bubble.

However, this is not enough to deter the return of a housing bubble in the absence of a significant change of the current loose monetary policy.

There are increasing indications that, while the Chinese economy is taking the lead in recovering from the economic slump, the domestic property market has surged ahead of most other sectors.