China’s July Home Prices Cool, As Escalating Trade War

China’s frenzied housing market has cooled, as a government effort to cap prices is biting, while the impact of the year-long US-China trade war has percolated into the economy and caused the domestic output to grow at the slowest quarterly pace in three decades.

The average cost of a new home rose by 0.59 per cent in July, marking the slowest increment in five months, while increases were recorded in only 61 of 70 cities being monitored. June’s growth was 0.66 per cent while prices grew 0.71 per cent in May, according to calculations based on the National Bureau of Statistics data.

“The government recently tightened the screws on developers’ financing and it has had quite a huge impact on the country’s housing market,” said Yan Yuejing, a research director with Shanghai-based property services firm E-House China R&D Institute. “We will see price increases continue to slow as more control measures will kick in and in some cities, prices will go down.”
Home prices had already reversed their June increments in China’s commercial hub of Shanghai and technology hub Shenzhen. Shanghai prices dropped 0.1 per cent, while Shenzhen – home to Tencent Holdings and Huawei Technologies – stayed unchanged. Read more...

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