China: Home price gains moderate further in December – Nomura

Research Team at Nomura notes that the China’s average property price growth in the 70-city survey slowed further to 0.3% m-o-m in December from 0.6% in November.

Key Quotes

“Prices in Tier-1 cities were unchanged in December after price inflation peaked at 3.1% m-o-m in August/September, while prices gains in Tier-2 and Tier-3/4 cities also moderated.”

“These data, which show that property markets continued to cool on policy tightening, are consistent with the December new household loans data, which moderated despite higher total new loans and suggest falling property demand.”

“Property investment picked up last year (6.5% y-o-y ytd in November 2016 from 1.0% in 2015) and contributed significantly to real GDP growth in 2016. Nevertheless, we believe the property sector will continue to cool and start to drag on growth in 2017. We maintain our call for real GDP growth to slow to 6.5% this year from an estimated 6.7% in 2016.”