Analysts at Nomura note that the simple average of property price inflation across 70 cities of China continued to rise in June, by 0.3 percentage points (pp) to 1.1% m-o-m.
Key Quotes
“The number of cities with sequentially higher prices increased to 63 in June from 61 in May, while the number of cities with lower or flat prices fell further to seven.”
“Property price inflation in Tier-1 cities edged up to 0.5% m-o-m in June from 0.4% in May, again driven mainly by prices in Guangzhou, which grew by 1.9% m-o-m in June.”
“Property price gains in Tier-2 cities accelerated further, by 0.4pp to 1.3% m-o-m in June, likely boosted by favourable policies in those cities to attract talent inflows.”
“Despite sequentially higher property prices, we believe downside pressures on the property sector are forthcoming, as evidenced by the slowing growth of property investment, sales, and funds for property investment.”
“We maintain our view of potential housing demand as stretched, given already-high property prices and household leverage.”
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