If China was blamed for the losses suffered in the global stock markets in the first two weeks, the country appears to be providing some favorable news to lift the sentiments. Its own market advanced 3.2% on Tuesday following the release of some economic data. For instance, the nation’s housing sales turned around to post a growth of 16.6% in the last year. In the preceding year, the sector suffered a drop of 7.8%. The reversal of fortunes came after the establishment eased its monetary policy.
Relaxation On Home Purchase Relaxation Helped
China’s housing stat also benefited from the relaxation of home purchases after concerns were raised on the continuous downturn in the property market was not good for the broader economy. According to the National Bureau of Statistics, Housing sales totaled $1.11 trillion in 2015. In the first eleven months itself, the sector witnessed 6.25 trillion yuan sales representing 18% uptick from the preceding year.
The month of December witnessed housing sales of 1.02 trillion yuan indicating YOY growth of 8.9%. According to the WSJ calculations, that was lower than the 23.5% growth achieved in the preceding month. After November 2014, the establishment in China has slashed its interest rates six times apart from lowering the cash reserve ratio for the banks.
Smaller Cities Yet To Join The Party
The Government’s easy policy on home purchase helped to lift the demand for the home in several cities. As a result, the prices have also shown improved trend in the big cities. However, the concerns remained on the small cities as they continued to face unsold apartments. The Chinese President expressed his desire to fix the inventory problem being faced in the housing sector.
The investment in real estate sector in China has slowed to 9.60 trillion yuan representing 1.0% growth. That was slower than the 1.3% growth achieved in the eleven months up to November last year. For the past one year, the sector has been attracting only muted response. Las year, building starts of both residential and commercial dropped 14% to 1.54 billion square meters. That was wide than the 10.7% drop witnessed in the preceding year as the developers were focusing on reducing their inventory.
