China home prices rise for third month in July

The Pak Banker - - INTERNATIONAL BUSINESS/SPORTS -

Chi­nese home prices rose for a third con­sec­u­tive month in July, fu­elled by a pick-up in sales and mar­ket sen­ti­ment, a rare coun­ter­point to a grow­ing list of grim in­di­ca­tors in the world's sec­ond-largest econ­omy.

Av­er­age new home prices rose 0.3 per­cent in July ver­sus June, ac­cord­ing to Reuters cal­cu­la­tions based on data re­leased by the Na­tional Bureau of Sta­tis­tics (NBS) on Tues­day, slightly slower than June's 0.4 per­cent rise.

Even a mod­est re­cov­ery in a sec­tor that ac­counts for around 15 per­cent of GDP is a welcome boost for an econ­omy head­ing for its weak­est growth in 25 years. Prop­erty sales bot­tomed out dur­ing the first half of 2015 af­ter de­clin­ing for more than a year, propped up by a bar­rage of gov­ern­ment sup­port mea­sures since last Septem­ber, in­clud­ing a se­ries of in­ter­est rate cuts and lower down­pay­ment re­quire­ments.

Ex­ports have tum­bled, in­vest­ment growth has hit re­peated lows, and the stock mar­ket crashed 30 per­cent in a mat­ter of weeks, keep­ing pol­i­cy­mak­ers busy with an un­prece­dented ar­ray of sup­port mea­sures, in­clud­ing a cur­rency de­val­u­a­tion and re­peated at­tempts to in­crease lend­ing.

Some of those mea­sures, along with gains made on stocks in a 150 per­cent run-up in the year be­fore the crash, have helped buy­ers like Lil­ian Liu, a 33-yearold worker in the tourist in­dus­try, who pur­chased a sec­ond home in the eastern city of Hangzhou last month. "It's the pol­icy that makes it pos­si­ble to buy my sec­ond apart­ment. With­out lower down-pay­ments, I couldn't make the de­ci­sion this time," she said.

While pol­icy mea­sures and in­creased lend­ing helped fuel a wave of pent-up home buy­ing in re­cent months, a huge over­hang of un­sold houses in smaller cities is keep­ing the sec­tor un­der pres­sure. China's over­all real es­tate in­vest­ment growth con­tin­ued to slow in the first seven months of 2015, but prop­erty sales and hous­ing in­vest­ment im­proved.

Com­pared with a year ago, home prices still fell 3.7 per­cent in July, eas­ing from the pre­vi­ous month's 4.9 per­cent drop, Reuters cal­cu­lated from NBS data showed.

China Vanke, the coun­try's largest prop­erty devel­oper, said on Mon­day that the hous­ing mar­ket was slowly emerg­ing from a year-long slump, but it would take time to see a full re­cov­ery.

"The num­ber of land ac­qui­si­tions has de­creased, and in­ven­tory is slowly be­ing di­gested. It'll take time, but it's con­firmed that a re­cov­ery is on­go­ing," said Vanke Pres­i­dent Yu Liang. An uptick in the prop­erty mar­ket will also be wel­comed by re­lated in­dus­tries, such as man­u­fac­tur­ers and re­tail­ers of fur­ni­ture and home ap­pli­ances.

Qiong Zhou, mar­ket­ing man­ager at home im­prove­ment chain B&Q (China), said the past three months had seen yearon-year growth, and monthly sales had kept grow­ing since this year's Spring Fes­ti­val, which fell in Fe­bru­ary. The NBS data showed home prices across China rose month-on-month in 31 of the 70 ma­jor cities mon­i­tored, up from 27 in June. Prices in first-tier cities such as Bei­jing, Shang­hai and Shen­zhen have been lead­ing the re­cov­ery.

"I've been watch­ing the hous­ing mar­ket for sev­eral months," said a Bei­jing lawyer who gave his sur­name as Wang. "Up­ward is surely the di­rec­tion of home prices in Bei­jing. A re­cent re­cov­ery in trans­ac­tions helped me sell my first flat quickly and got the money to buy another one," he said.

Bei­jing prices rose 1.0 per­cent last month from a year ear­lier, re­vers­ing June's drop of 1.1 per­cent, while Shang­hai prices were up 3.1 per­cent, com­pared with 0.3 per­cent in June. The south­ern city of Shen­zhen was the top per­former, how­ever, record­ing the fourth con­sec­u­tive monthly re­bound, up 23.6 per­cent in July from a year ago, fol­low­ing a 15.7 per­cent rise in June.

Newspapers in English

Newspapers from Pakistan

© PressReader. All rights reserved.