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China Housing August 2023

China: Housing market remains weak in August; government announces further stimulus

In January–August, the contraction in property investment steepened to 8.8% year on year from 8.5% in January–July. Indicators for commercial housing sales and real estate funding also deteriorated over the same period. Moreover, the sectoral confidence index dropped further in August, and house prices for key cities fell in annual and month-on-month terms in August according to data compiled by Macrobond.

At end-August, the government announced cuts to mortgage down payments and rates. Together with the Central Bank’s recent cuts to its policy rates and to banks’ reserve requirements, these steps could support the housing sector in the months ahead. That said, further easing measures will be necessary to turn the property sector around, potentially including government bailouts of troubled real estate firms.

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