Goldman Sachs, in its latest report, has raised apprehensions about the future course of China's housing market. The report discussed the impact of a downturn on the country's housing market on its metals sector. The bank cited possible overcapacity in China's housing market as a cause of concern.

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China boosted activity in its housing sector with its flexible credit policy, which led to an increase in sales volume as well as in housing prices. The increase in activity in China's housing sector had a corresponding effect on its metal market, giving rise to a rally. Iron ore experienced a surge in its prices, with a 28 percent increase this year.

Goldman Sachs, in its report titled "China housing: when good news becomes bad news," elaborated that overcapacity in the country's housing sector may aggravate its economic downturn when the demand falls. The report said that there is a "growing vulnerability" in China's property market as a policy-driven increase in housing is likely to lead to a slump due to a "payback effect."

In recent times, China's housing market has attracted a lot of attention.

Wang Jianlin, the billionaire tycoon behind Dalian Wanda group, has expressed his doubts about China's real estate sector. China is now looking to regulate the market to avoid any bubble burst. While interest rates at the macro level are likely to remain firm, local governments have tightened their grip on housing finance.

In a new development, four Chinese cities have revised their laws for property purchases. The new laws include measures to raise the down payment requirements and limit the number of property ownership. 

Tagswang jianlin, Goldman sachs, housing market