China’s August New Home Prices Plummet at Record Speed – You Won’t Believe the Numbers
China’s August New Home Prices Plummet at Record Speed – You Won’t Believe the Numbers: According to official statistics released on Friday, China’s new house prices dropped in August at the sharpest rate in ten months as the country’s real estate market continued to deteriorate in spite of a recent flurry of support measures.
Based on statistics from the National Bureau of Statistics (NBS), Reuters calculated that the reduction in July was 0.2% and that the current month’s decline was 0.3%. Prices had decreased by 0.1% from the previous year after a 0.1% decrease in July.
China has implemented a number of policies in recent weeks to encourage people to buy homes, such as loosening restrictions on house purchases in some cities and loosening certain lending regulations.
Although new house sales in large cities like Beijing have increased as a result of these measures, others are concerned that they may not last long and may even reduce demand in smaller cities.
For the second time this year, China’s central bank said on Thursday that it would reduce the amount of cash that banks are required to retain as reserves.
Nomura said in a research note on Friday that “some property developers and financial institutions are the more material risks in the near-term, and a small RRR cut could do very little to help.”
According to commentators, Beijing could need to implement more forceful property-easing policies in order to bring about a genuine recovery.
According to Nomura, authorities may remove almost all limits on real estate transactions, increase funding for the urban restoration initiative, expedite infrastructure expenditure, and reorganize local government debt.
Moody’s downgraded China’s real estate sector outlook on Thursday from stable to negative, citing obstacles to economic development that would impede sales even with government help, according to the rating agency.
One of the main obstacles to a long-term economic recovery in China is the country’s real estate crisis, with growing default risks among private developers endangering the nation’s financial and economic stability.
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