Chinese Real Estate Prices Rise for Fifth Consecutive Month amidst Policy Changes

Summary

  • In January, housing prices in 100 Chinese cities incrementally grew by 0.15%, surpassing December’s 0.1% gain, based on a survey by China Index Academy.
  • 49 cities recorded month-on-month housing price growth, a slight increase from 47 in December.
  • China’s second-largest economy has enacted several measures in the past year to rejuvenate the housing industry after a debt crisis triggered by regulatory crackdown on high leverage within the sector.
  • Recently, two crucial Chinese cities have lessened their home-buying restrictions, and a government-supported housing project procured its inaugural development loan through a whitelist mechanism.

Rising Real Estate Prices in Chinese Cities

A survey by China Index Academy revealed that over the course of five months, a steady upswing was seen in housing prices in 100 Chinese cities. January’s month-on-month growth rate turned out to be 0.15%, outstripping December’s rise of 0.1%.

Increase in Cities with Housing Price Growth

In January, 49 cities experienced month-on-month growth in housing prices. This number is slightly higher compared to the 47 cities recorded in December.

Policies Supporting Property Industry

With China’s property industry bearing the brunt of an extraordinary debt crisis due to a regulatory clampdown on the sector’s high leverage, the world’s second-largest economy has rolled out several policies over the past year to support the property industry’s revival.

Easing of Buying Restrictions and New Development Loan

Two major Chinese cities have provided a fillip to the sector by relaxing home buying restrictions this week. In addition, a state-sponsored property project has been granted the maiden development loan under a whitelist mechanism, as per state media reports.

In terms of the conversion rate, $1 currently equals 7.1790 Renminbi.

The said surge in real estate prices in China’s major cities can heavily impact forex trading, potentially leading to increased value for assets linked to the Chinese yuan/Renminbi.

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