China home sales ease but investment quickens

Business | Reuters and Stella Zhai 16 Jul 2019

Growth in China's new home prices cooled in June as sales shrank for a second month, but building starts and investment quickened, providing a cushion for the slowing economy while Beijing claims some wins in reducing market froth.

Average new home prices in China's 70 major cities grew 0.6 percent in June from a month earlier, easing from a 0.7 percent gain in May, marking the 50th straight month of price gains, data from National Bureau of Statistics showed.

Sixty-three of the total 70 cities surveyed reported higher prices in June, down from 67 cities in May. On an annual basis, home prices increased 10.3 percent in June, easing from the 10.7 percent growth in May.

Prices in China's four top-tier cities - Beijing, Shanghai, Guangzhou and Shenzhen - rose an average of 0.2 percent from a month earlier, slowing from a 0.3 percent uptick in May. For tier-two cities, which include most of larger provincial capitals, home prices grew 0.8 percent in June, identical with the previous month's advance.

Despite still-elevated prices in some of China's biggest cities, many analysts are still bearish on the market's overall outlook this year as demand in smaller cities - which account for 70 percent of sales by floor area - will likely falter, and as the government has not indicated it will ease nationwide property curbs anytime soon.

Meanwhile, Future Land Development (1030) is maintaining its full-year contracted sales target of 270 billion yuan, said Wang Xiaosong, who was appointed the new chairman after his father Wang Zhenhua was formally arrested on allegations of child molestation.

Shares of the embattled developer fell 1.2 percent yesterday with its affiliate S-Enjoy Service (1755) dropping 3.1 percent.

 

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