China's Property Market Is Feeling the Stimulus Effect
China’s year-long campaign of targeted stimulus to stoke the economy is making its presence felt in the property market, a sector that has the power to cement a recovery and improve the fiscal health of local authorities. Project sales of major home builders rebounded in March after contracting in the first two months of 2019, thanks to easier financing from banks, looser restrictions on home buying and lower mortgage rates. Beijing’s move this week to encourage citizens in rural regions to move to urban areas is also a timely boost, with dozens of smaller cities being told to scrap rules on local hukou residency permits -- curbs that have been used to keep a lid on property prices since 2016. A re-accelerating real estate sector could help bring forward stabilization in China’s economy after a bruising few quarters during which trade-war doubts and a cyclical slowdown combined to brake output. Faster home sales and higher prices have the potential to boost demand along the entire supply chain from steel to white goods. Rising land prices, meanwhile, can help top up government coffers depleted by tax cuts.
Tags : INTERNATIONAL