High-rise buildings in downtown Shanghai, China, March 12, 2018. China cut its benchmark mortgage rate by an unexpectedly wide margin on Friday, its second cut this year, as Beijing seeks to revive the ailing mortgage sector. housing to prop up the economy.
John Eisele | Afp | fake images
China’s new home prices were unchanged in June, the weakest result this year, data showed on Saturday, raising pressure on politicians for more stimulus as the economic recovery warms. It staggers.
The flat result for the previous month, with increases slowing across the country, was below May’s 0.1% rise, according to Reuters calculations based on data from the National Bureau of Statistics (NBS). Prices were also unchanged from a year earlier, regressing from a 0.1% rise in May.
The real estate sector, which accounts for a quarter of activity in the world’s second-largest economy, plunged sharply last year as developers defaulted on debts and halted construction on previously sold housing projects.
Central and local governments and regulators have announced a series of policies over the past year to prop up the sector.
Measures range from extended financial support for developers to multiple incentives for homebuyers. But the uncertain economic outlook and persistent weakness in the sector have weighed on confidence and domestic demand, reducing hopes of a quick recovery.
Weak house prices and falling exports add to the pressure on policy makers to do more to prop up the real estate sector and revive weak demand.
Markets widely expect more stimulus around a Politburo meeting of the ruling Communist Party later this month, which will set the tone for economic policies in the second half of the year.
“The property market urgently needs sound policies to boost confidence as small-scale policies can no longer rescue declining sentiment,” said analyst Chen Xiao at property data provider Zhuge House Hunter.
Policies such as boosting employment and income should be strengthened to support home buying, Chen said.
Thirty-one of the 70 cities tracked by the NBS saw monthly increases in new home prices, up from 46 in May. Prices held steady after rising in May in tier-one cities, including Beijing, and tier-two cities. They fell 0.1% in tier three cities.
There is room for “marginal optimization” of property policies considering deep changes in supply and demand in the real estate market, Zou Lan, a senior official at the People’s Bank of China (PBOC) said on Friday.
“PBOC officials hinted at further housing policy easing at Friday’s press conference, and we expect the July Politburo meeting to emphasize the need to stabilize the housing market,” Goldman Sachs economists wrote in a note from investigation.
The central bank on Monday extended until the end of 2024 some policies in a November rescue package for the liquidity-strapped sector. But the uncertain economic outlook and weakness in the sector have dented confidence, lowering hopes of a quick recovery.
A quarterly PBOC survey showed that 16.5% of households believe house prices will fall in the third quarter, down from the previous quarter, when 14.4% of households expected a drop.