US tapering will have limited impact, report says

The US Federal Reserve's announcement that it will cut monthly purchases of mortgage-backed and Treasury securities — to $75 billion from $85 billion, from January — will have a limited impact on China's markets, a report from real estate service provider CBRE said on Thursday.

Since the Federal Reserve's summer announcement that it might begin tapering at some point in 2013, the market has been struck with uncertainty over when and how fast tapering might come, making business decisions and planning difficult.

However, Wednesday's announcement can be perceived as business friendly, as it clarifies that the rate and extent of tapering will be moderate, according to the CBRE report.

The impact on the China property market should be minimal given China's current capital control policy and the fact that the market is predominantly driven by domestic investors, it said.

"The Fed tapering was well flagged to the market back in mid-2013. This should not be a surprise to the market," said Frank Chen, executive director, head of CBRE Research, China.

The tapering signaled the Fed's confidence in the underlying strength of the US economy and in better economic prospects for 2014. Over the long term, the improving external environment bodes well for the China export sector, which will support domestic GDP growth.

"Stronger economic growth will in turn lead to stronger office and investment demand," Frank added.