Housing Market: Bumpy Ride

CHINA - Report 28 Feb 2014 by FAN Gang and HE Liping

Executive Summary

Exports and imports both grew faster, up 10.6% and 10% y/y respectively in January. Almost all increases came from commodity trade. We expect the relatively high growth rate in trade to persist, and even to speed up -- especially after May.

CPI rose 2.5% y/y in January, flat on December. We expect the CPI number to be stable, due to the PBC’s robust monetary policy. The ex-factory price index of industrial products decreased 1.6% y/y. We expect the index to decrease further, considering the relative slowdown of the Chinese economy.

The broad money supply, M2, rose 13.2% y/y, down 0.2 pps from December. The rate has been slowly falling since June 2013. Due to the spring festival season effect, M0 increased dramatically, by 22.5%. We expect M2 to stay relatively constant, or to fall slightly. On February 8th, the PBC released the newest China Monetary Policy Executive Report. It emphasizes “aggregate stability and structure optimality,” which can be interpreted as projecting that the monetary supply will be stable, but the internal structure will be optimized to improve China’s financial health.

The real estate market boomed in 2013. The development of the real estate market will be varied in 2014, with price growth slowing. Prices could fall in some 3rd or 4th tier cities, but not by much. In general, the Chinese government is reluctant to allow the housing bubble to burst.

The new Ministry of Land and Resources data show that the average land transaction price among first-tier cities in January was 10,136 yuan per square meter, up 253.1% y/y, to a record high. The average housing price for 100 biggest cities rose 11.1% y/y, down 0.41 pps from December, among which prices in the 10 largest cities rose 17.11% y/y.

Now read on...

Register to sample a report

Register
Sign-in
Forgot your password?
Copyright 2024 GlobalSource Partners. All rights reserved. This report is prepared for GlobalSource Partners’ clients and may not be redistributed, reproduced, stored in a retrieval system, retransmitted or disclosed, in whole or in part, or in any form or manner, without the express written consent of GlobalSource Partners. This report is distributed simultaneously to our website and other portals used by GlobalSource Partners. The information herein was obtained from various sources and is believed to be reliable but GlobalSource Partners does not warrant its completeness or accuracy. Neither GlobalSource Partners nor any Country Analyst, officer or employee accepts any liability whatsoever for any direct, indirect or consequential damages or losses rising from any use of this report or its contents.