For the 9th Consecutive month, Chinese Home Prices Decline.
The average price of new homes in China’s 70 major cities fell 0.4% in January from the month before, marking the ninth consecutive decline. On an annual basis, prices fell 5.1% in January – marking the fifth consecutive month that prices have fallen from a year earlier.
The continuing slump comes despite a surprise interest rate cut by China’s central bank in November in an attempt to boost growth in the flagging economy.
The world’s second-largest economy grew at its slowest pace in 24 years last year, missing its official target and putting pressure on the government to take measures to avoid a sharper downturn.
Earlier this month, China’s central bank surprised markets once again by lowering banks’ reserve requirements to boost lending, which is expected to help the property sector.
Bloomberg reports China Property Recovery Fails to Gain Traction With Prices Dropping.
Prices fell in 64 cities from the previous month, compared with 65 in December, and were unchanged in four, according to data from the bureau of statistics on Tuesday. Average prices fell 5.1 percent from a year earlier, the biggest drop on record, according to Tom Orlik, chief Asia economist at Bloomberg Intelligence. Ganzhou, in central China’s Jiangxi province, joined Shenzhen in posting an increase in January from December.
Prices in January fell in 69 cities from a year earlier, compared to 68 in December, according to the data. They dropped 3.2 percent in Beijing, compared to a 15 percent gain in January 2014, while sliding 4.2 percent in Shanghai.
Asymmetric Central Bank
Note the ridiculousness of Chinese central bank policy.
The central bank was concerned the property sector was growing too fast, so they put on property curbs. Now the central bank is worried after a token 5% decline, a small down payment on what will eventually happen.
Such is the nature of asymmetric central bank policy, globally, not just in China. Universally, central banks sponsor bubbles, then seek to re-blow them at the first sign of trouble.
Mike “Mish” Shedlock