China’s Property Market Cooled Off, As Tightening Measures Started To Bite
Chinese home prices in 70 major cities fell by 0.1% mom in June, compared with +0.2% in May and +1.4% in April. Despite a marginal m-o-m drop, it was the first decline in 16 months, indicating that the tightening measures undertaken by the authorities have begun to bite. Yoy, property prices moderated to 11.4% in June, from +12.4% in May and a record high of +12.7% in April. This was the second month of easing and the slowest pace of increase in four months, indicating that property prices are beginning to ease. Recall that China has announced a series of measures to control the property market after a rapid rise in prices and loan growth. Besides raising minimum mortgage rates and downpayment ratios for some home purchases, the government has pledged to boost land supply and the construction of lowcost public homes. The authorities further intensified its efforts to crack down property speculation in April and it indicated that it may even impose a property tax if need be. The slowdown in property prices was attributed to a slower increase in prices of resale residential property, which eased to 7.7% yoy in June, from +9.2% in May and a peak of +10.5% in April. Similarly, prices of new property moderated to 14.1% yoy in June, from +15.1% in May and a peak of +15.4% in April. Slower increases in property prices were recorded in cities like Beijing, Wenzhou and Hangzhou.
The World Economy... - 13/7/2010
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