Allan von Mehren
Danske Bank A/S
-
Chinese house prices showed further signs of cooling in January. This follows several measures over the past six months to tighten the housing market (increase in down payment required, tighter lending standards for developers, restrictions on number of houses Chinese citizens can buy).
-
Growth in the 70-city house price index fell to 5.7% measured on the 3-month annualised rate. This is down from the peak of 15.7% in November last year.
-
Prices in tier-1 cities in particular are cooling after significant increases over the past 18 months. House prices in Shenzen – which have seen the fastest increases - are now falling slightly. Tightening measures have been the strongest in the big tier-1 cities.
-
It's still a very high priority for the Chinese government to rein in house price bubbles in the big cities and avoid speculative behaviour. At the annual Central Economic Work Conference in December it was stated that "houses are built to be inhabited, not for speculation" and that the goal is to "establish a fundamental and longterm system to curb real-estate bubbles and market volatilities". In the Q4 monetary policy report from the People's Bank of China (PBoC) released on 18 February it was also stated that it would "strictly limit the flow of credit into speculative housing purchases".
-
We look for a further moderate cooling of the housing market this year, which should put a brake on Chinese growth. This is underpinned by softer home sales data in recent months (see chart next page). However, low residential inventories should work to avoid a sharp downturn in both house prices and construction activity.
This publication has been prepared by Danske Bank for information purposes only. It is not an offer or solicitation of any offer to purchase or sell any financial instrument. Whilst reasonable care has been taken to ensure that its contents are not untrue or misleading, no representation is made as to its accuracy or completeness and no liability is accepted for any loss arising from reliance on it. Danske Bank, its affiliates or staff, may perform services for, solicit business from, hold long or short positions in, or otherwise be interested in the investments (including derivatives), of any issuer mentioned herein. Danske Bank's research analysts are not permitted to invest in securities under coverage in their research sector.
This publication is not intended for private customers in the UK or any person in the US. Danske Bank A/S is regulated by the FSA for the conduct of designated investment business in the UK and is a member of the London Stock Exchange.
Copyright () Danske Bank A/S. All rights reserved. This publication is protected by copyright and may not be reproduced in whole or in part without permission.
Recommended Content
Editors’ Picks
AUD/USD traders seem non-committed around 0.6500 amid mixed cues
AUD/USD extends its consolidative price move just above 0.6500 on Friday. The RBA's hawkish and upbeat market mood supports the Aussie, though mixed Australian PMI prints fail to inspire bulls. Moreover, bets for a slower Fed rate-cut path continue to fuel the post-US election USD rally and cap the currency pair.
USD/JPY slides to 154.00 as higher Japanese CPI fuels BoJ rate-hike bets
USD/JPY languishes near 154.00 following the release of a slightly higher-than-expected Japan CPI print, which keeps the door open for more rate hikes by the BoJ. That said, the risk-on mood, along with elevated US bond yields, could act as a headwind for the lower-yielding JPY and limit losses for the pair amid a bullish USD, bolstered by expectations for a less dovish Fed and concerns that Trump's policies could reignite inflation.
Gold price advances to near two-week top on geopolitical risks
Gold price touched nearly a two-week high during the Asian session as the worsening Russia-Ukraine conflict benefited traditional safe-haven assets. The weekly uptrend seems unaffected by bets for less aggressive Fed policy easing, sustained USD buying and the prevalent risk-on environment
Ethereum Price Forecast: ETH open interest surge to all-time high after recent price rally
Ethereum (ETH) is trading near $3,350, experiencing an 10% increase on Thursday. This price surge is attributed to strong bullish sentiment among derivatives traders, driving its open interest above $20 billion for the first time.
A new horizon: The economic outlook in a new leadership and policy era
The economic aftershocks of the COVID pandemic, which have dominated the economic landscape over the past few years, are steadily dissipating. These pandemic-induced economic effects are set to be largely supplanted by economic policy changes that are on the horizon in the United States.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.