House prices in China rose for the first time in a year on an annual basis in October, pointing toward a recovery in the slowing economy’s crucial property sector. Meg Teckman reports.
Out from months of shaky ground, Chinese house prices may be stabilizing. The average price for new homes on the market in October rose one-tenth of a percent on an annual basis. Reversing the trend from September's nearly one percent drop and marking the first on-year gain in 14 months. The country's metropolises led the way with tier-one cities like Beijing and Shanghai seeing stellar growth. Including the tech hub of Shenzhen where prices rose nearly 40 percent compared to last year. However it is the country's smaller, third and fourth-tier cities where a glut of unsold houses is keeping prices low. This is keenly felt by property developers as data released last week showed investment and new construction continue to cool further. Any recovery in the property sector would help boost the economy as a whole as the market accounts for around 15 percent of the country's output. And policymakers are keeping up hopes that government measures to revive the sector will soon trickle down into these struggling cities. The central bank has not only slashed interest rates several times this year but they also trimmed the required minimum down payment for first-time home buyers, the first move in five years. ENDS