China says prop­erty mar­ket to con­tinue re­cov­er­ing in sec­ond half

The Pak Banker - - BUSINESS -

BEI­JING: China's top eco­nomic plan­ner said on Mon­day that the prop­erty mar­ket was likely to con­tinue to im­prove in the sec­ond half of this year, a good sign for the strug­gling econ­omy. A year-long slump in the hous­ing mar­ket has dragged on the world's sec­ond-largest econ­omy, which is widely ex­pected to clock its worst per­for­mance in a quar­ter of a cen­tury this year. While home sales and prices have im­proved in big­ger Chi­nese cities in re­cent months af­ter a bar­rage of gov­ern­ment sup­port mea­sures, con­di­tions re­main weak in smaller cities and a huge over­hang of un­sold houses is dis­cour­ag­ing new in­vest­ment and con­struc­tion.

"In the sec­ond half, the re­cov­ery trend in the prop­erty mar­ket is likely to be sus­tained, which will cre­ate bet­ter sit­u­a­tion for con­sumer prices and sup­port fac­tory-gate prices," the Na­tional De­vel­op­ment and Re­form Com­mis­sion(NDRC) said on a state­ment on its web­site. In­fla­tion and trade data at the week­end showed do­mes­tic de­mand re­mained slug­gish in July. An­nual con­sumer in­fla­tion re­mained muted at 1.6 per­cent de­spite a surge in pork prices surg­ing, in line with fore­casts and slightly higher than June's 1.4 per­cent.

Pro­ducer or fac­tory-gate prices hit their low­est point since late 2009, dur­ing the af­ter­math of the global fi­nan­cial cri­sis, and have been slid­ing con­tin­u­ously for more than three years. The price data, along with weak ex­port num­bers re­leased at the week­end, have re­in­forced mar­ket ex­pec­ta­tions that Bei­jing will have to roll out fresh eco­nomic sup­port mea­sures soon if lead­ers want to meet their 7 per­cent growth tar­get for the year.

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