China reveals its 2016 growth, production and investment data tomorrow, but figures out yesterday confirm that the housing boom is still happening, but at a slower pace.
Prices of new homes in China grew last year at the fastest rate since 2011, but slowed in December by enough to calm fears of a speculative bubble.
The price moderation will come as a relief to China’s leaders as they wrestle with economic targets for 2017 and a more modest growth target of 6.5% as the country tackles pollution, over capacity and a mountain of debt built up over years of heavy official borrowing to fund stimulus campaigns.
China depended heavily on the surging real estate market and government stimulus to drive economic expansion last year with GDP expected to grow by 6.7% when the latest figures are released.
As well, industrial production, investment and retail sales figures for the December quarter and 2016 will be issued with the GDP report later today.
Data out yesterday showed average new home prices in 70 major cities rose 12.4% in December from a year earlier, compared to November’s record 12.6%.
National monthly growth cooled to 0.3% versus 0.6% in November, the National Bureau of Statistics said. That was the first month on moth price fall since March, 2015.
Twelve 12 of 15 markets that had been singled out by authorities as overheating had price falls, a significant increase from November as restrictions on home purchases kicked home.
The impact these purchasing curbs was more visible in short-term price trends December’s 0.3% rise from November was well under the 2.1% jump seen in September.
In month-on-month terms prices rose in 46 out of 70 cities, were static in four and fell in 20, with nine additional cities recording price falls compared to a month earlier.
But year on year terms China’s property markets are still booming – among the 70 cities surveyed by the statistics bureau: December saw prices rise in 65 cities and fall in five for the third month running compared to December 2015.
And some of the year on year rises in December were eye watering (even by Australian standards).
Prices in Shenzhen, Shanghai and Beijing prices rose 23.5%, 26.5% and 25.9% respectively from 2015.
China’s average home prices are forecast to rise 4.1% this year, while growth in property investment would rise 5.4%, a state-owned newspaper reported earlier this month, citing the Chinese Academy of Social Sciences.
