Wenzhou Pilot Plan Seen As Curbing Property Prices
Nearly 20 percent of private funds in Wenzhou were usually channeled into to real estate investment, Xie Yifeng, an independent property analyst, said. The pilot plan would no doubt speed up the movement of money out of the sector, especially given continued government restrictions on property investment, Xie said.Wenzhou cash speculates in property all over China. They are "group buyers" as well, pooling funds and buying up blocks of property in other cities. Speculation occurs at the margin with excess cash, therefore the removal of Wenzhou capital from the market would have a disproportionate impact on property prices.
...In Wenzhou, the country's unofficial capital of private enterprise, business-savvy locals are known for buying homes nationwide as investments. This is blamed for helping to inflate the property bubble.