Home sales in 42 Chinese cities monitored by China Confidential fell during the Chinese New Year holiday period, but underlying demand looks to have remained strong. This has led some local authorities to restrict access to cheap credit from housing provident funds and we think that such incremental tightening measures may continue if property prices stay buoyant in coming months. 

Pressures are building for a surge in both steel output and prices in coming weeks, although we continue to question how long this will be sustained for (CC Jan 24, Capital Intensive). On the production side, real estate sales and infrastructure investment - leading indicators of steel output - have recovered, while mills have cleared much of the overhang of high inventories which weighed the sector down last year. Moreover, we believe that there is upside to steel prices, which have, so far, significantly lagged the recovery in iron ore prices. In the absence of an abrupt shift in government policy, particularly regarding real estate, these factors should come together to provide a well-needed lift for the steel industry. 

Our survey of 300 real estate developers reveals the importance of first-time buyers to the market.

The Chinese government has heeded calls for more rigorous fuel standards in order to help combat China’s chronic air pollution.

Land sales rocketed in January, with commentators asking whether the land market is overheating again.

The Chinese housing market recorded unseasonably strong growth in January. Sales in 42 Chinese cities monitored by China Confidential recorded triple-digit growth YoY, a trend mirrored in listed developers’ January results.

Chinese home prices rose at a faster pace in January than December, according to data from the China Real Estate Index System (CREIS), a trend which was foreshadowed by our survey of 300 real estate developers (Real Estate Macro Indicator, Jan 31), published yesterday. Despite the continued rise in home prices, an official newspaper has suggested that a nationwide property tax will not be introduced this year, in line with our earlier prediction.

Our inaugural real estate survey shows that, on average, prices and sales volumes rose in January from December. However, while the pace of home price rises stabilised at December’s levels, sales grew at a slower rate.