China's housing markets may be cooling

Many cities have sought since last autumn to rein in soaring housing prices through various restraints on apartment sales, including limiting the number of apartments private investors can own, changed rules on resale, increased downpayment requirements and tougher rules on house loans. Even so, the National Bureau of Statistics reports that July prices in 70 cities surveyed rose at 9 % y-o-y, matching the June pace of growth. The skyrocketing prices of China's biggest cities showed signs of cooling, however.

The volume of housing sales also slowed significantly. In terms of liveable floorspace, the volume of housing sales rose 12 % y-o-y in the first seven months of the year. Sales during summer 2016 were up 27 %. Officials have sought to calm housing markets also by increasing supply. In January-July, the volume of new housing construction starts, again measured in m2 of floorspace, rose by 12 %. Sales of rights to land use zoned for construction were up 9 %. While supply by these measures rose at least as fast as a year ago, the volume of completed apartments in January-July was only about the same level as in the same period in 2016. Over 80 % of building construction involved residential housing. Less commercial and office space was completed in January-July than in the same period in 2016.

In any case, huge regional differences and spotty statistical data make it difficult to get a clear picture of what is happening in Chinese housing markets.