China’s house-price growth accelerated in
April as the central bank’s credit easing gave the property
market a much-needed lift out of the coronavirus shutdown.
* New-home prices in 70 major cities, excluding state-subsidized
housing, gained 0.42% in April, National Bureau of Statistics
data released Monday showed. That’s up from a 0.13% increase in
March.
* Prices in the secondary market, which is free from government
intervention, rose 0.22% last month after edging up just 0.05%
in March.
Key Insights
* The gain shows China’s property market is steadily recovering
as the nation returns to business-as-usual after widespread
shutdowns and travel restrictions hobbled the economy in the
first quarter. Data released Friday showed sales had almost
rebounded to year-earlier levels in April
* The central bank has cut the cost of funding to banks, pledged
liquidity to virus-hit industries and lowered requirements on
banks’ buffers to allow them to lend more. While most easing
measures didn’t target the property sector directly, buyers
expect mortgage costs to decline further as the base rate it’s
pegged to has been reduced twice this year
* “Relatively abundant credit is the biggest good news in the
property market,” said Yang Kewei, a research director at China
Real Estate Information Corp. “Even if it’s only slightly
accommodative to real estate, it will motivate those buyers on
the sidelines and increase their purchasing power.”
* The National People’s Congress, starting Friday, is expected
to lay out the government’s property policy for the rest of the
year. State-owned newspapers have reported that the economic
damage caused by the virus won’t change President Xi Jinping’s
vow that homes are for living in, not speculation — a mantra
aimed at stamping out buying frenzies and property bubbles.
(Bloomberg)