By Liangping Gao, Yukun Zhang and Ryan Woo <\/p>\n
BEIJING, July 15 (Reuters) – China’s new home prices contracted at a slower pace in June, but the modest improvement is unlikely to result in a broad recovery as economists expect weak \u200chousing demand to persist in the second half and as Beijing refrains from major stimulus. <\/p>\n
New home prices dropped 0.1% \u200cin June from the previous month versus a 0.2% decline in May, according to Reuters calculations based on data released by the National Bureau of Statistics. <\/p>\n
On an annual \u200bbasis, prices fell 3.3%, easing from a 3.5% decrease in May. <\/p>\n
China’s housing market slump, now in its fifth year, has been constraining household consumption and exacerbating the economy’s imbalance between strong industrial supply and weak domestic demand. Economic growth slowed sharply to 4.3% in the second quarter from a year earlier, official data showed on Wednesday, missing analysts’ expectations. <\/p>\n
“China enters the second half of the year facing a more difficult backdrop. \u200cDomestic demand remains subdued, while external headwinds are \u2060intensifying. Resilient exports have provided an important pillar of growth, but they cannot carry the economy alone,” said Sarah Tan, economist at Moody’s Analytics. <\/p>\n
Some economists said the housing market might be close to finding a \u2060bottom, but others cautioned that the downturn would continue without stronger policy support due to subdued consumer confidence. <\/p>\n
Home price data this year showed modest improvement in both new and resale markets in China’s top-tier cities, but developers in smaller cities continued to struggle with weak sales despite a renewed government \u200bpush \u200bto reduce housing inventory. <\/p>\n
The property market is expected to see only fleeting \u200bpockets of strength in the second half, rather than \u200ca broad-based rebound, with the divergence between prime and weaker markets set to persist, said Zhang Dawei, chief analyst at Centaline Property Agency. <\/p>\n
New and existing home prices in tier-one cities in June rose 0.1% and 0.3% month-on-month, respectively, while prices in both markets in tier-two and tier-three cities showed no month-on-month growth. <\/p>\n
On an annual basis, prices of both new and existing homes continued to fall across all city tiers in June, though declines narrowed in tier-one cities. <\/p>\n
MAJOR STIMULUS NOT LIKELY <\/p>\n
Morningstar analyst Jeff Zhang said July’s Politburo meeting was not expected to \u200cdeliver major stimulus, with support likely to remain focused on city-specific measures and \u200bfavourable adjustments to the housing provident fund. <\/p>\n
“The government’s current approach is mainly aimed \u200bat preventing systemic risks, and the property sector is unlikely \u200bto serve as a major growth driver for the economy going forward, making large-scale policy stimulus unlikely.” <\/p>\n
In an \u200carticle released in June, Qiushi, an official publication of \u200bthe Chinese Communist Party, called for \u200brepairing household balance sheets and stabilising the real estate market to “prevent the negative spiral of falling asset prices on consumer confidence”. <\/p>\n
While local governments have been doling out incentives for home sales in the past few months, the central government has refrained \u200bfrom launching nationwide major support policies for the \u200chousing market as an export boom reduced the urgency for injecting bigger stimulus into the economy. <\/p>\n
Property sales, investment and \u200bnew construction starts declined at a faster pace in the first half of the year, official data showed. <\/p>\n
(Reporting by \u200bYukun Zhang, Liangping Gao and Ryan Woo; Editing by Jacqueline Wong) <\/p>\n","protected":false},"excerpt":{"rendered":"By Liangping Gao, Yukun Zhang and Ryan Woo BEIJING, July 15 (Reuters) – China’s new home prices contracted…\n","protected":false},"author":2,"featured_media":550706,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[72,114,8980,113,32399,2413,61,60,12051,61933],"class_list":["post-550705","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-china","tag-domestic-demand","tag-economy","tag-home-prices","tag-housing-market","tag-ie","tag-ireland","tag-national-bureau-of-statistics","tag-stimulus"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/550705","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/comments?post=550705"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/550705\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media\/550706"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media?parent=550705"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/categories?post=550705"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/tags?post=550705"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}