China: Growth in house prices remains stable in October
House prices in 70 large- and medium-sized cities rose 0.5% in October in month-on-month terms according to a weighted average index calculated by Thomson Reuters from data issued by the National Bureau of Statistics (NBS). The print matched the result in the previous two months. According to the NBS, the sale price of newly constructed residential buildings increased in 50 of the 70 cities (53 in September).
House prices rose 7.8% annually in October, below the 8.4% rise in September and the lowest result in over one year. Annual average growth in house prices inched down from 9.8% in September to 9.7% in October.
October’s year-on-year deceleration suggests that the property sector is cooling. Against this backdrop, Jing Wang, China economist at Nomura, highlights that:
“We note that developers reportedly cut prices to boost new home sales and raise cash amid a tightening of property financing. We expect property market conditions to worsen, especially in low-tier cities. We also believe Beijing may need to reverse its tightening measures on the property sector no later than spring 2020 to stabilise growth.”