China Real Estate Report

China Real Estate Report

China is still witnessing a rapid rise in home prices in most larger Chinese cities, but may have peaked in the high-flying southern city of Shenzhen.

In detail, prices of new homes in 100 cities rose 12.39 per cent in July from a year ago, faster than the pace in June, research firm China Index Academy said.

Moreover, the average home price was 12,009 yuan (1,807) per square metre in July across the 100 cities, u 1.63 per cent from the previous month.

But in Shenzhen, where the cost of homes has risen the fastest in the country this year, prices peaked at 10,509.03 per square metre in the first week of the month.

In fact, they suggest that misplaced self-confidence is putting millions of people at risk. They are vulnerable to major missteps – and to exploitation by industry pros who may not have their best interests at heart.

New loans in China surged to a record high in the first half of the year as government spending coursed through the economy, but that new credit is generating less growth than before as China struggles with overcapacity and entrenched roadblocks to a more efficient and productive economy.

Concerns about debt and a buildup of cash on company balance sheets has led to speculation that further monetary easing will be limited, with the focus in the last five months of the year expected to be on structural reform and fiscal measures to boost growth.

Growth in industrial output and retail sales likely moderated slightly in July, the poll showed.

But urban fixed asset investment likely expanded 8.8 percent in Jan-July, a fresh 16-year low and cooling from 9.0 percent in Jan-June.

Economists are also expected to focus once again on private investment growth, which has cooled to record lows, leaving the economy more unbalanced.

Foreign exchange reserves likely fell to $3.20 trillion after unexpectedly rising in June due to a stronger yen.

China’s reserves have stabilized in the last few months despite new downward pressure on the yuan, as analysts say the Chinese government has been relatively successful with measures to limit capital outflows.

Forex reserves data are expected to be released this weekend, with trade, inflation and loan figures out next week.

Industrial output, investment and retail sales will be released on Aug. 11.

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Shayne Heffernan Funds Manager at HEFFX holds a Ph.D. in Economics and brings with him over 25 years of trading experience in Asia and hands on experience in Venture Capital, he has been involved in several start ups that have seen market capitalization over $500m and 1 that reach a peak market cap of $15b. He has managed and overseen start ups in Mining, Shipping, Technology and Financial Services.