High-rise buildings in downtown Shanghai, China, on March 12, 2018. China cut its benchmark reference interest rate for mortgages by an unexpectedly wide margin on Friday, the first time. the second cut this year as Beijing seeks to revive the ailing housing sector to support the economy.
Johannes Eisele | afp | beautiful pictures
China’s new home prices were flat in June, the weakest result this year, data showed on Saturday, increasing pressure on policymakers for more stimulus on a rebound. economic slowdown.
Results were unchanged from a month earlier, with growth slowing nationally, well below May’s 0.1% gain, according to Reuters calculations based on National Bureau of Statistics (NBS) data. ). Prices were also flat from a year earlier, down from a 0.1% gain in May.
The real estate sector, which accounts for a quarter of activity in the world’s second-largest economy, plunged last year as developers defaulted on loans and suspended construction on pre-sold housing projects.
Central and local governments and regulators have announced a series of policies over the past year to promote the sector.
Measures have ranged from extensive financial support for developers to diverse incentives for homebuyers. But the uncertain economic outlook and persistent weakness in the sector have dented confidence and home-buying demand, dampening hopes of any quick recovery.
Weak home prices and falling exports are adding pressure to policymakers to do more to support real estate and revive sluggish demand.
Markets expect more stimulus measures around the ruling Communist Party Politburo meeting later this month, setting the stage for economic policies in the second half of the year.
“The real estate market is in dire need of strong policies to bolster confidence as small-scale policies are no longer possible,” said Chen Xiao, an analyst at real estate data provider Zhuge House Hunter. save the dwindling sentiment.”
Chen said policies such as promoting employment and income must be strengthened to support home purchases.
Thirty-one of the 70 cities tracked by the NBS recorded monthly increases in new home prices, down from 46 cities in May. Prices were unchanged after rising in May in first-tier cities including Beijing and second-tier cities. They fell 0.1% in tier three cities.
Zou Lan, a senior official at the People’s Bank of China (PBOC), said there is still room for “marginal optimization” of asset policies considering profound changes in supply and demand. on the real estate market.
“PBOC officials hinted at further easing of property policy during Friday’s press conference and we expect the Politburo meeting in July to emphasize the need for stability. real estate market,” Goldman Sachs economists wrote in a research note.
The central bank on Monday extended until the end of 2024 some of the policies in its November rescue package for the cash-strapped sector. But the uncertain economic outlook and weakness in the sector have dented confidence, dampening hopes of any quick recovery.
A quarterly survey by the PBOC found that 16.5% of households believe housing prices will fall in the third quarter, down from the previous quarter, when 14.4% of households expected home prices to fall.
