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Correction to Previous Bullet: July, Not June PMI




Risk on keeps the lid on Govies

Repeats Story Initially Transmitted at 10:04 GMT Apr 18/06:04 EST Apr 18
--Property Investment and Prices Gain
--New Home Price Higher in 79% Surveyed Cities 
--Strong Demand and Historic Low Inventory Boosted Price Gain Acceleration 
     BEIJING (MNI) - China's property market is heating up again -- and this
time it is clearly supported by both sides of the equation: rising demand and
shrinking supply.
     A day after China reported its highest monthly property investment growth
in more than three years, official data released on Wednesday underlined the
resurgence in prices and sales in China's property market.
     New home prices gained 0.4% on a monthly basis, 0.2 percentage point faster
than the pace of gain in February, with 55 out of the 70 surveyed cities or 79%
of the medium and large cities experiencing month-on-month price gains, MNI
calculations showed. 
     Despite China's much-touted two-year campaign to tame housing bubbles,
relatively strong performance of the property market shows the momentum has only
been pent up and further gains in prices seems inevitable. 
     China: Residential Property Prices - Average Price Increases
e Ch                     De       Oc                 Jun
g %       Mar  Feb  Jan   c  Nov   t  Sep  Aug  Jul    e   May   Apr   Mar   Feb
Citi  M/       -0.       0.       0.  -0.  -0.
es     M  0.0    2  0.0   1  0.0   0    2    2  0.0  0.0   0.0   0.1   0.3  -0.1
      Y/  -0.       -0.  0.  -0.  0.            11.  13.
       Y    4  0.0    5   0    2   3  2.1  6.9    1    6  16.2  19.0  22.3  25.2
Citi  M/                 0.       0.
es     M  0.4  0.2  0.3   5  0.4   3  0.2  0.2  0.5  0.7   0.8   0.7   0.7   0.3
      Y/                 5.       5.
       Y  5.5  5.8  5.4   8  5.5   7  6.5  8.2  9.3  9.6   9.7   9.9  10.3  10.6
     Source: MNI Calculation from National Bureau of Statistics of China data
     Under policy curbs, price growth slowed 0.3 percentage point to 5.5% year
over year, the m/m growth in March was the highest since December at 5.8%. It
came in the so-called "Golden March and Silver April", referring to the period
when housing price and sales are supported by more buyers shopping for homes. 
     While the Chinese government issued 26 tightening policies in March, in
addition to 50 in the first two months, strong demand persisted according to
Centaline Group.
     Residential property price growth in lower-tiered cities supported the
overall m/m price acceleration. MNI calculations showed 29 so-called tier-3
cities -- or smaller Chinese cities -- had price gains in March, compared with
23 in tier-2 capital cities and three in top-tier cities. It's worth noting the
number of smaller cities where housing prices increased could be higher, as not
all were included in the official stats.
     The shantytown urban renewal project championed by Chinese Premier Li
Keqiang served as another contributor. As the Chinese government directly
compensates residents whose homes were affected, a large number of home
purchasers with strong buying power enter the property market.
     New home prices in top-tier cities, including Beijing, Shanghai, Guangzhou
and Shenzhen, regained upward momentum, up 0.1% month-on-month, compared with a
0.2 percentage point drop in February.
     The faster price gain was partly due to higher-priced property projects
coming on line quicker than expected after the government eased restrictions on
the maximum prices of property units.
     Finally, a historically low level of property inventory played a bigger
role on the supply side. According to the NBS, property inventories dropped
16.7% y/y at the end of March. Centaline Group data also showed inventory in the
same period reached the lowest level in 43 months.
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