Inflation has a huge impact on housing. Inflation generally leads to higher mortgages rates, which in turn increases the costs of financing a home purchase. These increased costs will push home prices down if salaries are not keeping up with inflation. China is now experiencing increased energy and food prices. This might spread as global reasouces are now exchanged in the international maket place.
Overall, the country's Consumer Price Index, increased 2.8 percent year-on-year in the first eight months of 2010, said Sheng Laiyun, the NBS spokesman. The Chinese government had set a target of trying to keep inflation within 3 percent for the year.