RHB | China | Home Prices Continued to Adjust Downward in June

Economic Research	18 July 2014
China
Economic Highlights
Home Prices Continued to Adjust Downward in June Growth in China’s new home prices (exclude affordable homes) slowed down for a sixth consecutive month in June on a yoy basis in 70 major cities monitored by the government, pointing to a continued adjustment of its residential housing sector. On average, new home prices were up 4.3% yoy in June compared to 5.6% in May based on our calculations, the slowest increase in fifteen months. Sixty-seven out of 69 cities that posted price increases in the month showed moderation in gains, including all the Tier-1 cities. Moreover, home price growth fell below 10% in all cities for the first time since March 2013. Xiamen, the second largest city in southeast Fujian province, overtook Shanghai as the biggest riser, with prices up 9.4% yoy in June. This was followed by Shanghai (+8.2%), Beijing (+8.0%), Guangzhou (+7.7%) and Shenzhen (+6.7%). Wenzhou remained the only city to post a price decline in June, with its prices down for a 34th straight month by a wider 5.3% yoy.   Economist:  Liang Siew Huay  | +65 6232 3851