Published on : Aug 18, 2014
Recently, a trend of fall in Chinese home prices has been noted. This decline has occurred for its third straight month.
During July, the prices of housing eased from June, but third straight monthly fall was noted. The prices were still up by 2.5 pc on year, however slowest gain was noted in 17 months. A fall of new home prices in 64 cities in June was displayed versus the 55 figure in June.
The new home prices declined in July from June for a third straight month and the price softness has dispersed to more major cities, which has underlined a worsening downturn of property in spite of the efforts put in by many local government to avoid this.
According to a senior statistician at NBS, the uncertainties of the outlook of the property market have resulted in keeping the potential home buyers standing on the sidelines. The once-accelerating China’s housing market has slowed this year, due to the sales and prices have turned towards south in their largest pull-back in duration of two years. This was driven in part by the cooling economy and also by the national government’s 5-year-long campaign aimed to keeping price rises in check.
The softness in China’s housing market that accounts for over 15 percent of China’s annual economic output and impacts directly around 40 other sectors of business has resulted into an increasing drag on the broader economy.
Respondents have stated that borrowing costs are rising and most banks felt do not appear willing to extend their loans to first-time buyers in spite of encouragement from the Central Bank.
Many domestic banks in Shanghai have denied that they have lowered the rates on interest on property for loans, according to the China Securities Journal.